Q: What is a STAR exemption? I understand that the STAR exemption is only for an individual’s primary residence. Would I still qualify if I am co-owner of the property along with my parents who live out of state?
A: The STAR exemption is a New York State tax relief program that lowers property taxes for qualified owners. There are two types of STAR exemptions: (i) Basic STAR and (ii) Enhanced STAR. The Basic STAR is available for primary residences where the resident owners’ and their spouses’ combined annual income is less than $500,000.00. The Basic STAR exempts the first $30,000.00 of the full value of a home from school taxes. The Enhanced STAR provides an increased benefit for the primary residence of senior citizens (age 65 or older) with a total combined annual household income of $79,050.00 or less. The Enhanced STAR exempts the first $64,200.00 from the full value of a home from school taxes.
Primary residence for the purposes of the STAR exemption is determined by where the taxpayer lives for the majority of the year. Some of the factors considered when determining primary residence are voting records, vehicle registration and the length of time spent at the property each year. You can only have one primary residence. Only one of the owners has to use the property as his or her primary residence to qualify for the exemption. Accordingly, in response to your question, if you occupy the property as your primary residence you would be entitled to the Star Exemption even if your co-owners live elsewhere.
All applications for the Basic and Enhanced STAR must be postmarked by March 15th (or the next business day if March 15th falls on the weekend). Once approved, lower property taxes will begin July 1st of the same year. There is no need to re-apply every year for the exemption. Owners of co-ops will also receive the tax reduction on July 1st; however, each management office receives a report from the Department of Finance each November breaking down the total exemptions by apartment/unit and therefore cannot credit the tax reduction to individual owners until December at the earliest. Additionally it is left to the co-op board to decide how to pass along the tax savings to individual shareholders (for example a co-op may reduce a Star Exemption recipient’s maintenance for a period of time).
The Legal Line Question by:
Neil B. Garfinkel
REBNY Broker Counsel
Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP