Property Tax Updates in New York

Tax Professionals' Resource
February 14, 2013 — 1,127 views  
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Among the various types of tax, property tax is the largest one which is imposed by the state of New York on its residents. This tax come under the jurisdiction of local governments and is a relatively stable source of revenue. All the properties in every municipality, except in Nassau County and New York City, are evaluated at a uniform percentage of the market value, on a yearly basis. The total property tax rate is then calculated as the product of the local property tax rate and this assessment.

Property Tax Updates

In the late 1990s, economic expansion allowed the local governments to keep property tax rates below inflation. Today, as a result of economic slowdown, property tax rates have increased and have become the fastest growing revenue in the state. To make the property taxes more affordable to the common man, authorities have made certain updates to the original tax laws.

An important update to the New York property tax rules was made in the year 2011. This modification, which is known as the property tax cap, was meant to establish a limit on the yearly growth of property taxes which are levied by local governments and school districts. Following this modification, many updates to the property tax laws were also made in 2012.

Suspension of STAR Benefits

According to the 2012 update made in New York property tax laws, STAR (State School Tax Relief) property tax benefits will be suspended for homeowners who have state tax obligations which are past due. This legislation will be valid from the school year of 2013-2014 and will expire at the end of the school year, 2015-2016.

Taxpayers who live in their own homes and have a total annual income which is less than 50,000 dollars will be eligible for STAR exemption. As per the new tax update, individuals who come under this category and have long pending tax liabilities, are bound to receive a 45 days’ notice from the Department of Property Taxes. This notice will be intended to inform the taxpayers that if they do not clear their tax liabilities at the earliest, then their STAR benefits will be suspended. The notice will also contain information as of how to clear the tax liability. The notice will also guide the taxpayer regarding the procedures to be followed in lifting the STAR suspension. If the information contained in the notice is incorrect, then the tax payers can file a complaint with the concerned authority.

The update also includes that a suspended STAR tax benefit will be offset against an individual’s past due state property tax liabilities. Also, only those tax payers who have a tax obligation of at

least $4500 will be affected by this update. The final decision regarding the suspension of STAR tax will be made by the State Tax Department, and neither the Board of Assessments Review nor the assessors have a right to make any modifications.

New York City Tax Updates

The Department of property taxes has made some recommendations in June 2012 to modify the property tax rules, exclusively for the city of New York. These recommendations are mainly intended to prevent the filing of false documents and information regarding properties. According to the new update, property owners have to file their annual income and expense statements by September every year, or else face a denial of the review of next year’s assessment.

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