In 2015, Governor Andrew Cuomo’s changes to the New York State School Tax Relief Program (STAR), affected many homeowners. There are two types of STAR Programs: Basic and Enhanced.
The Basic Program provides a $300 tax reduction and there is no age requirement. To qualify for Basic STAR the resident and/or their spouse cannot have a combined income of more than $500,000.
Income is calculated by an individual’s total federal adjusted gross income minus a taxable amount of total distributions from his or her annuities and/or individual retirement account (IRA). Further, for both Basic and Enhanced Star, the property must be the primary residence for one homeowner, and if a couple owns more than one property, they may only be eligible to apply for the STAR credit on one of their homes.
Enhanced Star provides a $600 tax reduction. In order to qualify for Enhanced Star the homeowner must be 65 years old or older or are the spouse or sibling of an owner who is 65 years old or older. Residents and/or spouses cannot have a combined income of more than $86,000. Both Basic and Enhanced Star require documentation to prove income and primary residence. If a property receives a 421a benefit, they are not eligible for the Star Exemption. A 421a exemption is a property tax exemption awarded to those who have done construction on a residential building or multi-family dwelling, which changed the value of the home.
As of 2016, applicants must register with the New York State Tax Department to receive a STAR credit as opposed to applying with an assessor. Furthermore, a qualifying applicant will receive a STAR credit by check as opposed to a tax credit. To be considered a new applicant, an individual must have purchased his or her home after March 15, 2015 or had not applied by that date.
The law office of Georgaklis & Mallas PLLC is experienced in various areas of real estate-related transactions. The firm’s skilled attorneys handle both commercial and residential transactions on behalf of lending institutions, real estate investment and management companies, business and individual clients. Call (718) 238-2400 or (212) 779-2400 for more information or to schedule a consultation.