2017 Real Property Tax Exemptions Update

For the next three weeks, in an effort to make sure you are properly updated, we will give you the specific details regarding this year’s Real Property Tax Exemptions.  The three we will outline are the Senior Citizen Homeowners’ Exemption (SCHE), Basic STAR and Enhanced STAR.

Tax Benefit:  

Senior Citizen Homeowners’ Exemption (SCHE)

Tax Benefit Details:  Reduces taxable assessment of the senior’s home by as much as 50%; Each county, city, town, village or school district can set maximum income limit between $3,000 – $29,000.  Localities have further option to seniors over $29,000 income less than 50% exemption using “sliding-scale option” with max. of $37,399.00; Income ranges for Nassau and New York city are 5% for $36,500 – $37,399; 10% for $35,600 – $36,499; 15% for $34,700 – $35,599; 20% for $33,800 – $34,699; 25% for $32,900 – $33,799; 30% for $32,000 – $32,899; 35% for $31,000 – $31,999; 40% for $30,000 – $31,999; 45% for $29,001 – $29,999; and 50% for 0$ – $29,000.

Property Types:

1, 2 and 3 family homes; Condominiums, Cooperative Apartments; Mobile homes; Mixed-Use properties such as apartment buildings, but only for the portion owned and used as a primary residence.

Age Limit:

Must turn 65 in the year of application.  (Ex.  64 year old can apply as long as you turn 65 by 12/31); At least one spouse or sibling (with at least one common parent) must turn 65.

Income Limit:

Combined income of all owners and their spouses cannot exceed $37,399.  (incl Social Security, earnings on IRA accounts, retirement benefits and capital gains); IRA & Reverse Mortgages – Contributions to IRA are not deductible.  Distributions from IRA are excluded from income.  Proceeds from reverse mortgage are excluded.  (Nassau)  SSI, Welfare, Gifts –  Does not include SSI, welfare, gifts or inheritances.  (Nassau)  Deductions – Depending on town and school district, may be able to deduct unreimbursed medical expenses, unreimbursed prescription drugs, Veterans’ Disability Compensation (Nassau)  C/Y or P/Y Tax Docs – Supply income documents for either 2016 or 2015 if 2016 tax return has not yet been filed.  W-2 or 1099 – copies requested for submission.

Residency:

All owners must occupy property as primary residence.  (Exceptions:  divorce, legal separation or abandonment, in-patient of residential health care facility such as Nursing Home or other facilities that provide lodging and physical care.  Provide documentation.)

12 Month Rule – Must have owned property for at least 12 consecutive months prior to filing date, unless you received exemption in previous residence.

School Aged Kids – School-aged child residing on property, senior citizen exemption cannot be granted.  Exception in Nassau is if the child attends private or parochial school or the school district opts to offer the exemption even with a school-aged child living in the home, SCHE may be granted.  However, child must not have been brought into the house for the purpose of attending a particular school within the school district.

Restrictions, Deadlines & Supplemental Information:

Restrictions – Cannot receive both SCHE and DHE (Disabled Homeowner’s Exemption.  If qualify for both, you will only receive SCHE).  Can receive both STAR (Basic or Enhanced and SCHE)

Death of 65+ spouse – If 65 or older spouse dies, the surviving spouse must be 62 or older to continue SCHE.

Estate – Exemptions will be removed.  Be careful about recomputation of property taxes after date of death.  (Escrow at real estate closing.)

Trust/Life Estate – Life tenant deemed owner for tax purposes.  Also may apply if all trustees or all beneficiaries qualify.

Entities – LLC/Corporations not permitted.

Co-Op – Municipalities authorized to grant to residential co-ops.  If granted, you receive an adjustment to your monthly maintenance fee.

Mixed-use – If a portion of property is used for other than residential purposes, exemption will apply only to portion used exclusively for residential purposes.

Trust – Property held in trust solely for the benefit of persons otherwise eligible for SCHE, veteran’s exemptions and STAR qualifies for those programs.  (OK for first party SNT, but why would you do it since it is a payback trust?)

Deadlines – New application:  March 15 for exemptions to start on July 15 of same year.  Renewal.  Every 2 years.

If you move – If you sell home, you can have SCHE moved to your new home by filing an application within 30 days of purchase.

Our next newsletter will talk about Basic STAR.