Wednesday, August 28, 2013

New Process to be in Place for New York State STAR Tax Exemption

The New York State School Tax Relief Program (more commonly known as the STAR Program), or New York State Real Property Tax Law §425, is a school tax rebate program offered in New York State aimed at reducing school district property taxes on the primary residences of New York residents. There are basically two types of STAR exemptions:

The Basic STAR program is available for owner-occupied, primary residences where the resident owners' and their spouses income is less than $500,000 and exempts the first $30,000 of the full value of a home from school taxes

The Enhanced STAR program provides an increased benefit for the primary residences of senior citizens (age 65 and older) with qualifying incomes and exempts the first $63,300 of the full value of a home from school taxes as of 2013-14 school tax bills (up from $62,200 in 2012-13). It is important to note that STAR exemptions apply only to school district taxes.

New legislation now requires all homeowners receiving a Basic STAR exemption to register with the New York State Tax Department in order to receive the exemption in 2014 and subsequent years.

Homeowners will not have to register in order to receive their 2013 STAR exemptions. Homeowners also will not have to re-register every year. Based on the information provided in the registration process, the Tax Department will monitor homeowners' eligibility in future years.

You can register for the STAR exemption online. You'll need to:
  • provide a STAR code (they're mailing codes to all Basic STAR recipients; or you can use the STAR code lookup)
  • provide the names and social security numbers for all owners of the property and spouses
  • confirm that the property is the primary residence of one of its owners (married couples with multiple residences may only claim one STAR exemption)
  • confirm that the combined income of the owners and their spouses who reside at the property does not exceed $500,000; and
  • confirm that no resident owner received a residency-based tax benefit from another state.
Data on the percent of property valuation exemptions for counties in New York State can be found at the  New York State Statistical Yearbook put out by the Rockefeller Institute of Government. For example, the table below shows the equalized exempt value of exempted properties by county in New York. This includes a break out of wholly exempt as well as partially exempt properties.
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