Star Exemption Q & A

Partial Exemption From School Property Taxes on Owner Occupied Primary Residences in New York State Under the School Tax Relief (STAR) Program
Q: What is STAR?
A: STAR is the New York State School Tax Relief program that provides an exemption from school property taxes for owner-occupied, primary residences.

Q: What if I purchase a new primary residence?
A: STAR Exemptions are not transferable. You must apply for the exemption on your new primary residence.
Q:What exemptions are available under the STAR program?
A: (1) The Basic STAR Exemption is for all homeowners, regardless of age or income. (2) The Enhanced STAR Exemption is available to senior citizen homeowners who are 65 years of age or older, during the year in which the exemption takes effect, and whose annual income does not exceed $73,000. Senior citizens whose annual income exceeds $73,000 will still be eligible for the Basic STAR Exemption.

Q: Will the income limit always be $73,000?
A: No. An annual cost-of-living adjustment (COLA) will be applied to the income limit for the Enhanced STAR each year. Please check the income limit every year to see if you qualify.

Q: How will I know how much my STAR Exemption is worth in terms of tax dollars?
A: Your school tax bill will state the amount of the STAR Exemption and your tax savings.   

Q: Does the STAR Exemption apply to all taxes on my property?
A: No. The STAR Exemption applies only to school district taxes. It does not apply to library taxes.

Q: What types of properties may be eligible?
A: To be eligible for either the Enhanced STAR or Basic STAR Exemption, persons must own and live in a one, two, or three-family residence, mobile home, farm home, condominium, cooperative apartment or multiple use property of which a portion is used by the owner as a primary residence.

 Q: What is meant by primary residence?
A: There is no single factor that determines whether a property is your primary residence, but factors such as voting, vehicle registrations, and length of time spent each year on the property may be relevant. The assessor may request proof of residence after the exemption has been granted to verify that the property remains your primary residence.

Q: I own more than one residential property. Can I receive the STAR Exemption on all the residences I own?
A: No. The STAR Exemption can be applied only to your primary residence.

Q: If I currently receive a Senior Citizens’ Property Tax Exemption, can I also receive the Enhanced STAR Exemption?
A: Yes. Low-income seniors who receive the Senior Citizens’ Exemption automatically qualify for the Enhanced STAR Exemption.

 Q: What is the filing process for non-seniors or seniors whose combined income exceeds $73,000?
A: Homeowners must file a Basic STAR application with the Nassau County Department of Assessment. Property owners who are granted the Basic STAR Exemption usually do not need to reapply in subsequent years, unless a new deed is filed on the property. A written notification must be received by the assessor within 60 days of the date of any change in deed or primary residence.

Q: If I filed for an Enhanced STAR Exemption and was approved, must I re-file?
A: Yes! A renewal application will automatically be sent to you each year. The renewal must be filed by January 2. 

Q: What is the Income Verification Program?
A: If you file a NYS Income Tax Return every year, you have the option of having your income verified for the exemption by the NYS Department of Taxation and Finance for future years. If you choose to have your income verified by the state, you will automatically be renewed every year based on financial eligibility.

Q: When must I file the STAR application?
A: STAR applications are accepted throughout the year and must be filed by January 2 to be applied to the upcoming school tax year.

Q: Where do I obtain and file the application?
A: Applications can be obtained and must be filed with the Nassau County Department of Assessment located at 240 Old Country Road, 4th Floor, Mineola, New York 11501-8402. STAR applications can also be obtained by following the links on-line at “mynassauproperty.com”, by calling (516) 571-1500, or CLICK  for links to download the Basic and Enhanced STAR applications. 

Q: Do I have to prove my age to file for Enhanced STAR?
A: Yes. The first time you apply for the Enhanced STAR Exemption, you must give satisfactory proof of age, such as a birth certificate, passport, military record, driver’s license, or immigration document. The applicant must be 65 years of age by December 31st of the year the exemption takes effect. For property owned by siblings or a husband and wife, only one resident owner has to be at least 65-years-old.Homeowners applying for the Basic STAR Exemption do not have to supply proof of age.

Q: What is the definition of income?
A: For the Enhanced STAR Exemption, income is based on your Federal Adjusted Gross Income (AGI) less any taxable IRA distribution. The total must not exceed $73,000. When filing, you must attach a copy of all pages of your 2006 Federal or State Income Tax Return(s) to your application. If you did not file a tax return, proof of all taxable income is required (i.e., 1099 statements of interest, dividends, pension, W-2, etc.) 

Q: May the STAR Exemption be granted if the property has been placed in a trust?
A: Yes, if all of the beneficiaries qualify.

Q: Would an otherwise qualified person remain eligible to receive the STAR Exemption if he or she, by deed, reserved a life estate and granted someone a remainder interest in the property?
A: Yes, if the holder of a life estate is entitled to full possession and use of the property without any restrictions, he or she is deemed to be the owner for all purposes (including taxation).  

Q: Are there any penalties associated with filing a false application?
A: Yes. Anyone who misrepresents his or her primary residence, age or income may be subject to a $100 penalty and prohibited from receiving the STAR Exemption for five years. In addition, the violator may have to return up to three years of the tax savings, and may be subject to criminal prosecution.

Real Estate Deed

The deed is what proves that you own your property.  There are a number of ways to take ownership in a property.  If you purchse by your self you would be the only owner name d on the deed, but if you purchase with some one else there are different ways to take ownership.  If you are a legally married couple you take as tenants by the entirety.  This means that if one spouse dies the property automatically passes to the surviving spouse.   In the event of a divorce the property would then become held as tenants in common, which means that the owners each own their own share.  If one owner dies their share will pass through their will or the intestacy statutes.  Tenants in common can also own different percentages of the property.  The other option is Joint tenants with rights of survivorship.  This option is for unmarried people who take the property with the intention that if one owner dies the remaining owners would own the entire property.  Or said a different way the deceased owners share would pass equally to the surviving owners.  If your are purchasing a property these are issues you need to discuss with your attorney prior to closing.

Real Estate Transactions

When you are buying or selling a property and hire an attorney it is important that you consult your attorney if you intend to do something that is covered by the terms of the contract.  Generally, an attorney will not get involved in the mortgage process, but sometimes the contract may need to be amended to accommodate the lender.  Some things should never be done if you are a purchaser.  Never stop payment on a down payment check, the seller can choose to cancel the contract if you do.  Do not fail to apply for a mortgage in the time period established by the contract,  you need a commitment or rejection in this time period.  If you are the purchaser or seller make sure that the property has all of the proper permits and certificates of occupancy, if the property does not the lender will require that they are obtained.  Also, when you attempt to sell this will turn into your problem.  If there is something that was agreed to it must be in the contract.  If you have any Real Estate questions contact our office

Homebuyer Tax Credit

On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time

Tax Credit for Homebuyers
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction
It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of $800,000.

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Remember, the new tax credit program includes a number of details and qualifications.