If you are a homeowner, you may have received a letter in the mail, or will be shortly, from the New York State Tax Department concerning STAR registration. While I can understand that a letter from the state tax department can cause some anxiety, that shouldn’t be the case in this instance.
First, for those that are unaware, STAR is a New York State tax relief program that lowers your school property taxes and helps make home ownership more affordable. There are two types of STAR savings:
Basic STAR, available to all New Yorkers with household incomes of less than $500,000 who own and live in their homes;
Enhanced STAR, available to senior citizens (age 65 and older) who meet income requirements.
STAR reduces the taxable value of your home before the school tax rate is applied. Basic STAR exempts the first $30,000 of the full value of your home. If you qualify for Enhanced STAR, the exemption increases to the first $63,300 of the full value of your home.
STAR benefits are available on your primary residence only. To be eligible for either the Basic STAR or Enhanced STAR tax cut, you must own and live in a one-, two-, or three-family home, condominium, mobile home, cooperative apartment, or farm house.
I helped establish this program in 1997 and have successfully advocated added state funding so that it will continue to provide valuable tax savings to homeowners. As part of this year’s state budget, there is a record $3.4 billion allocated for property tax relief under the STAR program.
Now, as part of an effort to protect New Yorkers against inappropriate or fraudulent STAR exemptions, new legislation was passed requiring 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.
A recent state comptroller’s report showed that taxpayers are being cheated out of tens of millions of dollars every year by individuals who are fraudulently obtaining STAR exemptions for their properties. This statewide accountability effort will help end that abuse. Most homeowners are doing the right thing, but when someone takes advantage of the system everyone else has to pay more in taxes. That’s not fair or legal.
One key point to keep in mind – the new registration program is only for those who receive the Basic STAR exemption. Senior citizens receiving the Enhanced STAR exemption are not affected by the new registration requirement. However, in order to receive Enhanced STAR, seniors must continue to apply annually, or participate in the income verification program.
Also, homeowners who have not received STAR benefits in the past are not affected by this year’s registration procedure. If you are a new homeowner, or just haven’t applied in the past, contact your local assessor and fill out an application so you can start taking advantage of this money saving program.
As I said at the start of this column, the tax department is mailing instructions to those who currently receive Basic STAR benefits. The letters include a STAR code that homeowners will need to register. Homeowners can also look up their codes online or by calling the tax department. The fastest and easiest way for homeowners to register is through the tax department’s website, www.tax.ny.gov. Homeowners can also call (518) 457-2036 to register or to receive their STAR codes.
The STAR exemption is a terrific tax saving tool, in fact, I would like to see it extended to others. For a number of years, I have sponsored legislation that would offer the STAR exemption to small businesses employing twenty people or less. These small businesses are the foundation of our rural economy and easing their tax burden would help them compete and expand.