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What you need to know for 01/16/2017

320K homes to lose STAR exemption

320K homes to lose STAR exemption

Ten percent of the properties in Schenectady lost a valuable tax exemption this year through the sta

Ten percent of the properties in Schenectady lost a valuable tax exemption this year through the state’s effort to weed out unqualified properties.

In Schenectady, about 825 properties lost their STAR exemption this year, the assessor’s office said. There are now 7,045 properties still eligible for the exemption.

What is not yet clear is how many of those properties lost the exemption because their owners broke the rules. Some City Council members have worried residents wouldn’t realize they had to refile and would only learn of their mistake when they got a surprisingly high tax bill.

By comparison, STAR exemptions in the city of Amsterdam fell by less than 2 percent, with 39 fewer properties receiving the tax break. In Saratoga Springs, exemptions went down by 311 properties — a 6.5 percent drop.

State officials said they removed the exemption from 320,000 properties. In total, 2.4 million owners refiled for their properties, including those who lost one or more exemptions. People with multiple properties are only allowed to keep the exemption for one property.

But the 2.4 million filers is a sharp decline from last year, when the state had 2.7 million STAR-exempted properties. State officials suspect many people didn’t file because they knew they couldn’t meet the eligibility requirements.

“We required your Social Security number, which we never did before,” said spokesman Cary Ziter.

That allowed the state to verify income and make sure only one property was registered for the exemption. It also allowed the state to be sure each owner was following the rules describing the “primary residence” that is eligible for the exemption.

“The overwhelming number of denials were not primary residence or didn’t register,” Ziter said.

Among the primary residence rules that tripped up many was the ban on exemptions from other states. Many owners had a similar tax exemption in Florida or other states, Ziter said, which meant they couldn’t take the STAR exemption in New York.

In another case, a property owner in New York City tried to claim the exemption for 12 apartments, including his primary residence, Ziter said.

He added he thought other violations were “inadvertent,” as owners simply misunderstood the rules. They would file for their apartment in New York City, their summer home and their house in Albany. Now, they can keep the exemption for just one.

“You have to declare which one is your primary residence,” he said.

The denials proved the refiling initiative worked to save the state money by eliminating ineligible properties, he added.

This year, the state required every homeowner to refile for their STAR exemption, which reduces property taxes. Owners can only get the reduction on their primary home, and only if they don’t get a similar exemption in other states and make less than $500,000 a year. Their spouse also can’t get the exemption on any property.

Previously, owners could get away with multiple exemptions because the application was filed with their local assessor’s office. If they owned property in two or more municipalities, each office had only one exemption on file — and no way of knowing the owner was getting another exemption somewhere else.

But some residents were wrongly denied. Anyone can appeal the decision and should call 457-2036 to “start the dialogue” about errors, Ziter said.

“There will be legitimate appeals,” he added. “They are still coming in.”

Among the appeal-worthy issues: residents who bought a house just before the deadline and ended up filing too late and spouses who got divorced and thus can each claim a separate house for the exemption, he said.

“Call the tax department and open up a conversation,” he added.

Every owner who was denied was informed by a letter from the state, he said.

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