New york state real property tax credit

The Senior Citizen Homeowners’ Exemption (SCHE) is a New York State tax credit program that provides a property tax exemption of up to 50% of the amount of property taxes to senior homeowners age 65 and over. The maximum amount of annual income cannot be more than $58,399.

DISABLED HOMEOWNERS’ EXEMPTION

The Disabled Homeowners’ Exemption (DHE) is a New York State tax credit program that provides a property tax exemption of up to 50% of the amount of property taxes for homeowners with disabilities. The maximum amount of annual income cannot be more than $58,399.

SCHOOL TAX RELIEF PROGRAM

The New York State School Tax Relief Program (STAR) provides New York State homeowners with partial exemptions from school property taxes. There are two levels of benefits: Basic STAR and the Enhanced STAR.

REAL PROPERTY TAX CREDIT

The Real Property Tax Credit is a benefit for New York State income tax filers who own or rent property and have a household gross income of $18,000 or less and pay either real property taxes or rent their residence(s). To apply for the credit, taxpayers must fill out NYS tax form IT 214, Claim for the Real Property Tax Credit, and attach it to their NYS income tax return.

The Enhanced Real Property Tax for NYC Residents

The Enhanced Real Property Tax Credit is available to NYC residents who have a household gross income of less than $200,000 and pay either real property taxes or rent for their residences. The credit can be as much as $500. To apply for the credit, taxpayers must fill out NYC-208 and attach it to their NYS income tax return.

Senior Citizens Homeowners’ Exemption (SCHE)

DESCRIPTION OF THE SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

The Senior Citizen Homeowners’ Exemption (SCHE) provides a property tax exemption for homeowners age 65 and over by reducing the property’s assessed value and thus lowering the amount of property taxes. The amount of the reduction is based on the combined federal income tax returns for all owners on the deed. The table below provides an estimate of how much the assessed value of the property will be reduced.

If the Owners’ Income Is Between

Reduce The Assessed Value By)

$57,500 and $58,399

$56,600 and $57,499

$55,700 and $56,599

$54,800 and $55,699

$53,900 and $54,799

$53,000 and $53,899

$52,000 and $52,999

$51,000 and $51,999

$50,001 and $50,999

Any exemption granted to a qualified person, who is a tenant-stockholder of a cooperative apartment, will be credited by the taxing authority against the assessed value of the property. The reduction in property taxes resulting from the exemption will be credited by the cooperative apartment corporation against the amount of such taxes chargeable to the tenant-stockholder.

QUALIFYING FOR THE SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

Age

Each of the owners of the property must be 65 years of age or older by December 31st of the current tax year. If there is more than one owner, all owners must be 65 and over, except when the property is owned by husband and wife or siblings. In these cases, only one needs to be 65 or over.

Where an exemption had been in effect on property owned by a married couple, a surviving widow or widower must have been 62 years of age or over when the spouse died in order to retain eligibility. Similarly, where the exemption was granted to a married couple and the eligible spouse leaves the property due to divorce, legal separation or abandonment, the exemption is retained if the remaining spouse is at least 62 years of age.

Property Ownership

The property must be the primary residence of the owner, whether a house, condominium or cooperative apartment.

The home must have been owned by one of the owners for a minimum of 12 consecutive months prior to the application for the exemption.

The property must be used exclusively for residential purposes. If a portion of the property is used for other than residential purposes, the exemption will apply only to the portion that is used exclusively for residential purposes.

Kevin turned 65 in November of 2020. He bought his home in June 2020. He files for SCHE in March 2021. Since he had not resided in is home for the 12 months prior to March 15, 2021, he is not eligible for the exemption for the 2020 tax year. However, he will be eligible for the exemption in 2021, if he remains in his home.

Residency

The property must be the primary residence of, and must be occupied by, all eligible owners of the property unless an owner is absent from the property because they:

Individuals who own more than one property during the tax year can only use their legal residence to receive the exemption.

Citizenship/Immigration Requirements

Applicants must be U.S. citizens or immigrants who are legally residing residents. Immigrants must have either a Social Security Number or an Individual Taxpayer Identification Number (ITIN) to file a tax return.

Assets/Resources

There are no assets/resource requirements.

Income

The maximum amount of annual income is no more than $58,399. Total household income is the applicant’s Federal Adjusted Gross Income less the taxable amount of IRA distributions. For countable and non-countable income, go to https://www1.nyc.gov/site/finance/benefits/landlords-dhe.page.

Income includes the combined income of all property owners. If married, the income of both spouses (even if one spouse is not a qualified homeowner) must be included in the total unless one spouse is absent from the residence due to a legal separation or abandonment. The income of a non-resident spouse, who retains an ownership interest after the divorce, is not included.

Income is based on the latest preceding “income tax year” prior to the date of application. This usually is the preceding calendar year.

If an owner is residing in a nursing home, their income will not be counted, unless their income exceeds the amount paid by the owner, their spouse or a co-owner for care to the nursing home. Proof from the facility of the amount paid for an owner’s care must be submitted with the application.

CLAIMING THE SENIOR CITIZEN HOMEOWNERS’ EXEMPTION

Filing for the First Time

For those not currently receiving the Senior Citizen Homeowners’ Exemption, an online application may be submitted.

The filing date in NYC is March 15th, however applicants would need to be 65 by December 31st of that same year.

See below, Additional Resources,) for free tax preparation information.

Renewing the Benefit

The SCHE benefit must be renewed annually. The Department of Finance should send a renewal application when it is time to renew the benefit. NYC Renewals must be submitted by the 15th of the calendar year following the tax filing year, or the property taxes could increase significantly. Property owners also have the option to complete an renewal online at https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_SCHE_RNW or go to https://www1.nyc.gov/site/finance/benefits/landlords-sche.page for a paper renewal application.

Disabled Homeowners Exemption (DHE)

DESCRIPTION OF THE DISABLED HOMEOWNERS’ EXEMPTION

The Disabled Homeowners’ Exemption (DHE) provides a property tax exemption for homeowners with disabilities by reducing the property’s assessed value and thus lowering the amount of property taxes. The amount of the reduction is based on the combined federal income tax returns for all owners on the deed. The table below provides an estimate of how much the assessed value of the property will be reduced.

If the Owners’ Income Is Between

Reduce The Assessed Value By)

$57,500 and $58,399

$56,600 and $57,499

$55,700 and $56,599

$54,800 and $55,699

$53,900 and $54,799

$53,000 and $53,899

$52,000 and $52,999

$51,000 and $51,999

$50,001 and $50,999

Any exemption granted to a qualified person, who is a tenant-stockholder of a cooperative apartment, will be credited by the taxing authority against the assessed value of the property. The reduction in property taxes resulting from the exemption will be credited by the cooperative apartment corporation against the amount of such taxes chargeable to the tenant-stockholder.

QUALIFYING FOR THE DISABLED HOMEOWNERS’ EXEMPTION

Documented Disability

The owner must have a documented physical or mental disability, not due to the use of alcohol or illegal drugs, that substantially limits that person’s ability to engage in one or more major life activities, such as perform manual tasks, walking, seeing, hearing, speaking, breathing, learning, working.

Documentation can include items such as a disability award letter from the Social Security Administration, an award letter from the U.S. Railroad Retirement Board or U.S. Postal Service, a certificate from the New York State Commission for the Blind, or a Veterans Administration letter stating that you are entitled to a veterans disability pension. Go to https://www.tax.ny.gov/pit/property/exemption/disablreqmnt.htm for more information.

If there is more than one owner, all owners must have a documented disability, except when the property is owned by husband and wife or siblings. In these cases, only one needs to have a documented disability.

Property Ownership

The property must be the primary residence of the owner, whether it is a house, a condominium or a cooperative apartment.

The property must be used exclusively for residential purposes. If a portion of the property is used for other than residential purposes, the exemption will apply only to the portion that is used exclusively for residential purposes.

Residency

The property must be the primary residence of, and must be occupied by, all eligible owners of the property unless an owner is absent from the property because they:

Citizenship/Immigration Requirements

Applicants must be U.S. citizens or immigrants who are legally residing residents. Immigrants must have either a Social Security Number or an Individual Taxpayer Identification Number (ITIN) to file a tax return.

Assets/Resources

There are no assets/resource requirements.

Income

The maximum amount of annual income is no more than $58,399. Total household income is the applicant’s Federal Adjusted Gross Income less the taxable amount of IRA distributions. For countable and non-countable income, go to https://www1.nyc.gov/assets/finance/downloads/pdf/payment_operations/2019/dhe-sche-worksheet.pdf.

Income includes the combined income of all property owners. If married, the income of both spouses (even if one spouse is not a qualified homeowner) must be included in the total unless one spouse is absent from the residence due to a legal separation or abandonment. The income of a non-resident spouse, who retains an ownership interest after the divorce, is not included.

Income is based on the latest preceding “income tax year” prior to the date of application. This usually is the preceding calendar year.

If an owner is residing in a nursing home, their income will not be counted, unless their income exceeds the amount paid by the owner, their spouse or a co-owner for care to the nursing home. Proof from the facility of the amount paid for an owner’s care must be submitted with the application.

CLAIMING THE DISABLED HOMEOWNERS’ EXEMPTION

All owners (each person on the deed or stock certificate) must complete the “Owner Information” section of the application. Information for all owners is required even if all the owners do not reside at the property. Individuals must indicate whether it is the primary residence of each owner and whether the owners are spouses or siblings.

Indicate on the application the names of owners not required to file and include the reason why and include supporting documentation.

Filing for the First Time

For those not currently receiving the Disabled Homeowners’ Exemption, an online application may be submitted.

See below, Additional Resources, for free tax preparation information.

Renewing the Benefit

The DHE benefit must be renewed annually. The Department of Finance should send a renewal application when it is time to renew the benefit. Renewals must be submitted by the 15th of the calendar year following the tax filing year, or the property taxes could increase significantly. Property owners also have the option to complete an renewal online at https://a836-pts-efile.nyc.gov/SmartFile/Filing/FilingType/Info/NYC_DHE_RNW or go to https://www1.nyc.gov/site/finance/benefits/landlords-dhe.page for a paper renewal application.

School Tax Assessment Relief (STAR)

DESCRIPTION OF THE SCHOOL TAX RELIEF PROGRAM

New York State’s School Tax Assessment Relief (STAR) provides property tax relief to qualifying New York State homeowners. There are two parts to the STAR program – BASIC STAR and ENHANCED STAR – with different eligibility criteria for each. Most homeowners receive STAR as a credit, though some receive it as an exemption (see caution below on receiving STAR as an exemption).

STAR Credit Program

Under the STAR credit program, eligible homeowners whose income is $500,000 or less will receive a check in the mail.

STAR Exemption Program

Homeowners who receive their STAR benefit as an exemption receive a reduction on their school tax bill. Receiving the STAR benefit as an exemption may not be as beneficial as receiving it as a credit; individuals, may receive a greater benefit if they switch to the STAR credit to receive a check instead. While the value of the STAR credit may increase by as much as 2% each year, the value of the STAR exemption savings does not increase. For more information about switching, go to https://www.tax.ny.gov/pit/property/star/switch.htm.

The STAR exemption program is NOT available to new applicants. New homeowners, or those who were not receiving the STAR exemption on their current home in 2015, can register for the STAR credit program to receive a check. In addition, those receiving the exemption who want to switch to the STAR Credit Program can do so by visiting https://www.tax.ny.gov/pit/property/star/switch.htm for more information.

Homeowners who currently have a STAR exemption will need to reapply with the assessor if they are receiving the Basic STAR exemption and wish to apply for the Enhanced STAR exemption (typically when one turns 65), or if the homeowner continues to own the property but have filed a new deed.

Basic STAR/Enhanced STAR

There are two levels of STAR benefits: Basic STAR, available to anyone who owns and lives in their own home with earnings less than $500,000 and the Enhanced STAR, available to senior homeowners with incomes less than $92,000 or less for 2022 or $98,700 or less for 2023.

QUALIFYING FOR THE SCHOOL TAX RELIEF PROGRAM

Age Requirement

Eligible Property Owners

Applicants for both Basic and Enhanced STAR must own the property they use as their primary residence, including one, two, and three family homes, condominiums, cooperative apartments and manufactured homes, also known as mobile homes.

A primary home is usually the home where an individual lives for more than half the year. Individuals who own more than one property during the tax year can only use their primary residence to receive the STAR tax reduction.

Under STAR, individuals who reside in a mixed-used property can only claim the portion of the property used as a residence.

Residency

Applicants for both the Basic and Enhanced STAR must reside in New York State. Individuals must file for the exemption with their local assessor’s office within their municipality.

Assets/Resources

There are no assets/resource requirements.

Income