Deadline Approaching for Homeowners to Continue STAR Tax Exemptions
Dec. 10, 2013 — A change in the processing of the New York State School Tax Relief (STAR) program may cause nearly half of New York City's homeowners, including co-op shareholders and condo apartment-owners, to miss an average $280 property-tax break due them.
For the first time since the STAR exemption was enacted in 1997, homeowners under 65 years old who are already enrolled are now required to register with the State in order to continue receiving it. Previously, enrollment was automatic so long as the taxpayer continued to own the residence. As the Dec. 31 registration deadline approaches, 53 percent of City homeowners have registered, compared to 66 percent statewide.
STAR reduces homeowners' annual property taxes — the traditional way of funding public schools — by exempting the first $30,000 of the assessed value of a primary residence. Initially applied only to New York State residents 65 years old or more, it was shortly expanded to include an all-ages tier called Basic STAR. The seniors version is now called Enhanced STAR.
Tangled Web
The low registration percentage may partly due to confusing information at the State Dept. of Taxation and Finance website, which refers to "2013 STAR exemptions" without clarifying this refers to the school year — autumn 2013 to spring 2014, already in progress — rather than the typical calendar year used for other State taxes.
The reason for the change, according to the New York City Independent Budget Office, is that while homeowners are entitled to receive the STAR benefit for one property only, an audit released earlier this year by State Comptroller Thomas DiNapoli found that roughly a fifth of the claims were ineligible, mostly for double-dipping both a primary and a secondary residence. Other improper exemptions included homes receiving the tax break despite being in foreclosure.
How to Register
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Cooperatives generally apply for the entire building, while individual condominium unit-owners each apply personally and receive it directly. With co-ops, says the State Tax Dept., STAR savings appear on the school-tax bill for the cooperative cooperation. The corporation, through its managing agent, must credit the tax savings against the fees of the shareholders who received the exemptions.
In order to receive the 2014 Basic STAR exemption, covering the 2014-2015 school year, homeowners who already have been receiving it must register by Dec. 31, 2013. They may do so online at this page of the State site or, alternately, at their local assessor's office. In New York City, this is at 55 Hanson Place in Brooklyn; on Long Island, this is at 250 Veteran's Memorial Highway in Hauppauge, N.Y.
Once registered, Basic STAR homeowners do not need to re-register every year.
Senior citizens with household Federal Adjusted Gross income of $81,900 or less are eligible for Enhanced STAR. Those who have been receiving it are not affected by the new registration requirement, but must continue as before to reapply annually with form RP-425.
New Homeowners
New homeowners have a separate process, with differing due dates across different counties. Additionally, New York City and Nassau County use separate forms from the rest of the state, available on this page of the City Department of Finance website, with a deadline of March 15, 2014. There is no requirement for length of ownership of the primary residence, but applicants must have Federal Adjusted Gross household income of less than $500,000.
Further details are available at the New York State page "Apply for STAR" or by calling (518) 457-2036.
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