December 31: Deadline For STAR Application

By Margaret Whitely

The State of New York has a new program to reduce school property taxes. Under the guidelines of this program owners of residential properties may qualify for a partial exemption from school taxes.

To qualify for the "enhanced" STAR program for 1998/1999 school year property owners must be 65 years of age or older and must have an income of less than $60,000. All real property owners will be eligible for the "basic" STAR program starting with the 1999-2000 school year.

The deadline for filing an application for the 1998/1999 school year is Dec. 31 and the application must be filed with the Nassau County Department of Assessment, 240 Old Country Road, Mineola. Just call 571-1500 to receive an application.

What Is STAR?

STAR is the New York State School Tax Relief program that provides an exemption from school property taxes for owner/occupied, primary residences. The state-financed exemption is authorized by section No. 415 of the Real Property Tax Law.

Who is eligible for exemption?

Eligible senior citizens may receive reduced school taxes under the "enhanced" STAR exemption for the first time for school year 1998/1999. To be eligible, property owners must be 65 years of age or older, with incomes that do not exceed $60,000 a year. For property owned by a husband and wife, only one of them has to be at least 65 years of age. Their combined annual income, however, must not exceed $60,000.

When will STAR exemption be available for other residential property owners?

The "basic" STAR program will be extended to all primary-residence homeowners, regardless of age or income, starting with school year 1999/2000 and will be phased in over three years.

What is the "enhanced" STAR exemption?

This refers to the STAR exemption available to senior citizens whose incomes do not exceed $60,000.

How will a residential property owner know how much STAR exemption is worth in terms of tax dollars?

His/her school tax bill will state the amount of the STAR exemption and its savings. The information will be included in a new "Property Taxpayer's Bill of Rights" that also is part of the STAR program and will be used for the first time with school property tax bill for 1998/1999.

Does the STAR exemption apply to all taxes on a homeowner's property?

The STAR exemption only applies to school district taxes. It does not apply to property taxes for other purposes such as county, town or city.

How is the STAR exemption computed in places that do not assess properties at their full market value?

The STAR exemption will be adjusted by use of state equalization rates to reflect the fractional level of assessment in assessing units that do not assess property at full, market value. This will result in a fair allocation of the STAR exemption.

What types of properties may be eligible?

To be eligible for either the enhanced or basic STAR exemption, persons must own and live in a one, two or three-family residence, mobile home, farm home, condominium or cooperative apartment.

If you own more than one residential property can you receive the STAR exemption on all residences owned?

No. The STAR exemption may only be applied to a primary residence.

If you currently receive a senior citizen's property tax exemption, under preexisting law Section No. 467 of the Real Property Tax Law, are you entitled to both this exemption and the new STAR exemption?

Yes. Low-income seniors who are receiving the preexisting senior citizen's exemption automatically qualify for the STAR exemption. As a result, they need only to file and qualify for the preexisting exemption and they will receive both that exemption and the STAR exemption.

If a senior citizen is not eligible for the preexisting exemption, but whose income does not exceed $60,000 how do they get the STAR exemption?

If a senior citizen is not receiving the preexisting senior citizen exemption, his/her property may still be eligible for the enhanced STAR exemption, but it must be applied for at the Nassau County Department of Assesment. If an application is granted, it must be reapplied for each year thereafter in order to keep the enhanced exemption in effect.

What is the process for non-seniors whose combined incomes exceed $60,000?

They must file a completed application form for the basic STAR exemption with the local assessor. The STAR exemption is a state-funded program, but the form must be filed with the local assessor and not with the state. It is the local assessor who has the responsibility for reviewing the application and determining eligibility. STAR exemption generally will not need to reapply in subsequent years. However, they will need to notify their assessor if their primary residence changes.

Homeowners applying for the basic STAR exemption do not have to supply any proof of income. Are there any penalties associated with filing a false application?

Yes, there is a penalty for material misstatements. Anyone who misrepresents his/her primary residence, age or income may be subject to a $100 penalty, may be prohibited from receiving the STAR exemption for five years, may have to return up to three years of tax savings and may be subject to criminal prosecution.

Do I have to prove my age?

Yes. The first time a senior citizen applies for the STAR exemption you must satisfactorily prove age with a birth certificate or baptismal certificate. If those documents are unavailable a hospital birth record, an affidavit of age from the Social Security Administration, marriage record, passport, military record, immigration document or other reliable record may be submitted to show age. Note: For property owned by a husband and wife, only one of them has to be at least 65 years old by the filing deadline.

Homeowners applying for the "basic" exemption do not have to supply proof of age.

Do property owners have to prove income?

Yes, but only for those property owners who are applying for the "enhanced" STAR exemption available to senior citizens whose incomes do not exceed $60,000. Remember, for property owned by a husband and wife, combined income must be no greater than $60,000. Be sure to attach to your application form copies of your latest federal or New York State income tax returns, in addition to proof of age.

Your income for STAR purposes is not necessarily the same as your income for federal or state income tax purposes. When calculating your income for STAR purposes, include Social Security and retirement benefits, interest, dividends, total gain from the sale or exchange of a capital asset, which may be offset by a loss from the sale or exchange of a capital asset in the same income tax year, net rental income, salary or earnings and net income from self-employment.

Do not include any return of capital, gifts, inheritances, monies earned through the federal Foster Grandparent Program, or reparations received as a victim of Nazi persecution.

If you have net rental income or net income from self-employment you may not deduct depreciation allowances for the exhaustion, wear and tear of real or personal property held for the production of income.