Tax Relief: A Half-Dozen Ways to Say, "Whew!"

• New York City Co-op and Condo Property Tax Abatement

Any individual shareholder/unit-owner whose apartment is used as a residence and who owns no more than three units in the same development can apply to the New York City Department of Finance (DOF) annually by Feb. 15. Eligibility is determined as of January 5. One exception is apartments in developments receiving benefits from any other tax-exemption program, such as Mitchell-Lama 421(a) or J-51.

The abatement is paid as a credit against real-estate taxes. With co-ops, the board credits it on the maintenance bill, or, in rare cases, issues a check. Note that while the board must by law credit the shareholder/unit-owner, it can apply the credit in the same month that it imposes a (usually) same-amount assessment. If the resident is a new owner, he or she should contact management and provide name, social security number, previous owner’s name, amount paid for the unit, and the date of sale.

• New York City Rebate

In 2007, co-op and condo owners using their unit as their primary residence each received a $400 rebate. The only requirements: They had to have been the owner of record on September 1, 2007, and all property-tax payments had to be current as of July 1, 2007. If you received a STAR exemption or any other state-sponsored individual tax relief in 2007, you were qualified for this rebate and received a check in October from the city DOF.

• New York State School Tax Relief Program (STAR)

This program from the state Department of Taxation & Finance gives you a credit against your real-estate taxes. There are two levels of STAR: basic (no age or income restrictions) and enhanced (owner must also be 65 years of age or older and total annual income of all owners must, in metropolitan New York City, be less than $120,000).

Shareholders/unit-owners can only receive one STAR exemption for one apartment. If a resident owns multiple apartments, for example, he or she cannot receive a STAR exemption on more than one of them. However, if you co-own an apartment and only one of you uses the apartment as a primary residence, you can still receive a STAR exemption.

You can request an application by calling 311 or simply print it from the NYC.gov/STAR website. You do not need to reapply for the basic STAR exemption every year, but once you turn 65, you will have to apply for the enhanced version and recertify your income each year. All applications must be received prior to January 5 for the tax year beginning July 1 of that year. That means if you submit your application by January 3, 2008, you will receive the STAR exemption for the tax year starting July 1, 2008.

If you own a co-op, STAR exemptions are credited to the co-op and a breakdown of the STAR exemption by unit is provided to the co-op in November of each year, after which the shareholders may be credited on their maintenance bills or issued a check by the co-op.

• New York State Veteran’s Exemption

A qualified veteran or, in some cases, a veteran's spouse, child, or parent, is entitled to a 15 percent exemption on real-estate taxes for a primary residence, with additional exemptions if the veteran served in a combat zone or was disabled. Note that the current Iraq War has not yet been added to the list of applicable conflicts.

• New York State Senior Citizen Homeowner’s Exemption (SCHE).

If you are 65 or older, and your federal adjusted gross income minus unreimbursed medical expenses is less than $35,500, you may qualify for a five to 50 percent reduction in the assessed value of the home. When the assessed value is reduced, the total tax bill is automatically reduced as well.

• New York State Disabled Homeowner’s Exemption

Certain low-income homeowners who are disabled may likewise qualify for a five to 50 percent reduction reduction in the assessed value of their home.

DOFing your Hat

The DOF has made it easy to apply for these various abatements and exemptions by creating one form, called “Exemption and Abatement Application for Owners,” which is available at www.nyc.gov or by calling 311. This form must be filed by March 15 of each year.

Since the burden of applying for the co-op/condo abatement falls on boards and managing agents, most maintain spreadsheets and use computer programs to track the status of unit eligibility and ownership. A common practice is for buildings to send reminders in late January to residents, with copies of the form attached, and to offer assistance to the elderly, who often find completing the form difficult or confusing. Boards can establish a committee to work with management in assisting people with their applications for these benefits.

With a little effort and a few memos, everyone gets some tax relief.

Theresa M. Racht is a partner at Racht & Taffae.

Art by Liza Donnelly

Adapted from Habitat February 2008. For the complete article and more, join our Archive >>