2017 Real Property Tax Exemptions Update: Part II – Basic STAR
March 28, 2017
Tax Benefit:
STAR – Basic (Basic School Tax Relief)
Tax Benefit Details:
Reduces school tax liability by exempting a portion of the value of home from school tax. Based on first $30,000 of full value of home. (Generally) Special rules for New York City, Buffalo, Rochester, Yonkers and Syracuse.
Property Types:
1, 2 and 3 family homes; Condominiums, Cooperative Apartments; Mobile homes; Farm dwellings.
Commercial Mixed-Use: Portion of mixed-use property that serves as primary residence qualifies even if the property is not primarily residential in character. (assessed value attributable to residence portion) (Ex. 2 story commercial building with 2nd floor residence OK.)
Proration: No proration necessary. If property falls in the qualifying categories (1-2 family home etc.), full exemption applies.
Mitchell-Lama Co-Op: Eligible but since Mitchell-Lamas are generally real property tax exempt, benefits are in STAR-related credits that reduce monthly charges.
Multiple Properties on Land: Each residence would receive STAR but only one STAR exemption for land. However, 2 family house is one property and only gets one exemption even if two siblings live on it.
Age Limit:
No age limit.
Income Limit:
Combined 2015 income of owners and spouses cannot exceed $500,000 (includes alimony, unemployment, workers’ comp.)
Do NOT submit 2016 income documents.
Residency:
Owner-occupied, primary residence.
NO 12 MONTH RULE. Unlike SCHE, no 12 consecutive month ownership requirement. Must merely own home at application date.
Nursing Home – STAR exemption granted even if owner lives in a NH as long as no one other than co-owner or a spouse of owner resides in the house.
Two Homes – A married couple may receive a STAR exemption on no more than one residence, unless living apart due to legal separation
Death of STAR applicant – Basic STAR exemption remains on the property but only for the assessment roll based on taxable status date.
Restrictions, Deadlines & Supplemental Information:
Restrictions – Can receive both STAR (Basic or Enhanced) and SCHE; Cannot receive both Basic STAR and Enhanced STAR.
OLD STAR vs. NEW STAR – New STAR applicants. If house purchased after 3/15/2015 or did not apply for STAR by 3/15/2105, you are a NEW STAR applicant. Will not receive a property tax exemption but instead receive a check.
New STAR applicants – Must register with NYS Tax Department instead of applying with your assessor to receive STAR credit. Dollar value of the credit will be the same as property tax exemption.
Old STAR recipients – If you already had STAR for the 2015 – 16 tax year, you do not need to register for STAR. You will continue to receive the STAR exemption not STAR credit. OLD Basic STAR recipients upgrading to Enhanced STAR will file paper application and continue to receive exemption, not the credit.
Complication for Trusts – When STAR rebate checks are issued for properties in trust, it will issue in the name of the Trustee. Possible solution may be to double-endorse the check by the Trustee and Grantor.
Update: March 1, 2017 – NYS Assembly passed bill to stop new STAR process and convert system back to old configuration. Major system glitches discovered. New bill transitions STAR system back to old until better system can be implemented. Stay tuned.
Corporation – Unless it is a farm dwelling, corporation does not qualify.
LPs – Granted if primary residence of one or more partners provided LP does not engage in commercial activity and it is for estate planning/protection. Partner(s) must personally pay real property taxes.
LLC – Not eligible, unless it is a farm dwelling.
Trusts – Revocable or Irrevocable – Trust beneficiary treated as owner. If senior creates trust and remains in home, senior is owner, not child trustee.
Life Estate – Life tenant treated as owner for STAR.
Deadlines – New app – 3/15/17 for exemptions to start on 7/15/17.
Renewal – Generally do not need to reapply in subsequent years.
Our next newsletter will talk about Enhanced STAR.