Property Tax Relief in New York State

In June, 2011, WKBW News reported that legislation had been passed in the New York State Legislature to cap increases in property taxes at 2% a year or the inflation rate, whichever is less. This cap should provide some relief to homeowners in New York where according to the report, property tax rates increased by more than 73% from 1998 to 2008.

Property taxes in New York State are assessed by counties, cities, towns, villages, school districts and special districts. Property is assessed based on its market value and property tax rates are established by the local taxing entities. There are certain property tax exemptions available to qualifying homeowners in New York State.

STAR exemption

According to the New York State Department of Taxation and Finance, Office of Real Property Tax Services, the New York State School Tax Relief Program (STAR) provides two types of partial exemptions from school taxes. You qualify for a property tax exemption on the home you own and occupy if your income is not more than $500,000. This includes your spouse's income if you are married. The exemption is the first $30,000 of the full value of your home.

If you are 65 or older and your income (including your spouse's income if you are married) is $79,050 or less, you can qualify for an enhanced STAR exemption of the first $60,100 of the full value of your home from school property taxes. For this purpose you income is your federal adjusted gross income less the taxable amount of total distributions from IRAs.

To apply for the STAR exemption, you should file Form RP-425 with your local tax assessor by the Taxable Status Date, which is generally May 1. You need to demonstrate that you meet the income requirement or give your tax assessor Form RP-425-BV to allow them to verify your income. New York City has its own form -- the Exemption Application for Owners. And Nassau County also has its own exemption forms.

You can find a listing of counties in New York State on the New York State Department of Taxation and Finance, Office of Real Property Tax Services website. The listing provides links to the county website and information on property tax rates and exemptions in each county. Under each county you can find links to the cities, towns, and villages in that county.

Senior citizens exemption

Local governments and school districts in New York have the option to grant a senior citizen's exemption, which is 50% of the assessed value of the property. To qualify, generally you must be 65 or older and your income must be $29,000 or less. But local taxing entities also have the option to grant exemptions of less than 50% if your income is more than $29,000.

This exemption is not automatic and you must apply for it. You should submit Form RP-467 to your local tax assessor, generally by March 1. This application also serves as your application for the STAR exemption. You can claim both the senior citizen's exemption and the enhanced STAR exemption if you qualify. The New York City Exemption Application for Owners includes the senior citizen's exemption. And Nassau County has its own application form.

Veterans' exemptions

Veterans who purchase property with certain eligible funds can claim a partial exemption that is generally up to a maximum of $5,000. The exemption is from general municipal taxes but not school taxes or special district levies. Eligible funds include veterans' pensions, bonuses or proceeds from insurance, compensation paid to prisoners of war, mustering-out pay, etc. To claim this exemption you should file Form RP-458.

Veterans who served during wartime can claim the alternative veterans' exemption for 15% of the assessed property value. And veterans who served in a combat zone qualify for exemption on an additional 10% of the assessed value. There is an additional exemption for disabled veterans. You should file Form RP-458-a.

Local taxing entities have the option to grant a reduction in property taxes paid by veterans of the Cold War period. Disabled veterans can qualify for an additional exemption. To claim the exemption you should file Form RP-458-b.

Exemption for persons with disabilities and limited income

Local governments and school districts have the option to grant persons with disabilities and limited incomes an exemption from property taxes. The basic exemption is 50% of the assessed value of the property. Generally, the income limit can be set up to $29,000, but localities can grant exemptions of less than 50% to persons with income over $29,000. To claim the exemption, you should check with your local tax assessor for the requirements and forms for applying. You will need to provide documentation to certify your disability and proof of your income.

Sources:

Exemption Application for Owners, NYC Department of Finance

Exemption Forms, Nassau County Assessor's Office

Form RP-425, Application for School Tax Relief (STAR) Exemption

Form RP-425-BV, New York State Department of Taxation and Finance, Office of Real Property Tax Services

Form RP-458, Application for Veterans Exemption from Real Property Taxes

Form RP-458-a, Application for Alternative Veterans Exemption from Real Property Taxes

RP-458-b, Application for Cold War Veterans Exemption from Real Property Taxes

Form RP-467, Application for Partial Tax Exemption for Real Property of Senior Citizens (And for Enhanced School Tax Relief (STAR) Exemption

How the Property Tax Works, New York State Department of Taxation and Finance, Office of Real Property Tax Services

Listing of Counties in New York State, New York State Department of Taxation and Finance, Office of Real Property Tax Services

Rent Regulations And Cap On Property Taxes Pass, WKBW News

Tax Policy & Exemptions, New York State Department of Taxation and Finance, Office of Real Property Tax Services