Property Tax Benefits for New York City Homeowners
by CBJC Staff March 12, 2021
Updated on December 1, 2021
This article was written by Kayla Gebhardt, Pro Bono Scholar of the the Homeowner Stability Project.
Owner occupants of houses, condos, and co-ops in New York City may qualify for a number of important property tax breaks which will lower their quarterly property tax bills and remove the property from the Tax Lien Sale. Seniors, people living with disabilities, veterans and certain other categories of low to moderate income homeowners are eligible for these significant benefits. While March 15 was the deadline to apply for many of these exemptions for the 2021/22 tax year, homeowners can still apply online or by mail to receive a tax exemption in the 2022/23 tax year. In the past few years, new laws—and the pandemic—have changed eligibility and application requirements. The following addresses important updates to common property tax exemptions.
Senior Citizen Homeowners’ Exemption (SCHE)
SCHE is an exemption that reduces the assessed value of a homeowner’s home by up to 50% which can result in significant property tax savings. All owners of the property must be 65 or older unless the owners are spouses or siblings. If so, only one owner must meet the age requirement.
All owners must occupy the residence as their primary residence, but exceptions may be granted in cases of divorce, legal separation, or abandonment. The owner must have owned the property for at least 12 consecutive months prior to filing the application, but an exception may apply to homeowners that received the SCHE exemption on their previously-owned residence.
SCHE must be renewed every two years. Initial applications and renewals can be submitted online or by paper application with the NYC Department of Finance.
In addition, because of the COVID-19 Emergency Eviction and Foreclosure Prevention Act, most 2021 SCHE recipients are not required to renew their benefits this year unless there has been a significant change, such as a transfer of ownership.
Disabled Homeowners’ Exemption (DHE)
DHE is available to homeowners with disabilities who have an annual income of $58,399 or less. The total combined income of all owners and their spouses cannot exceed this income threshold. All owners must be persons with disabilities unless the home is owned by siblings or spouses. In such cases, only one owner must be a person with a disability. The property must be the recipient owner’s primary residence, but the property may still be eligible for DHE if the owner is receiving inpatient care at a healthcare facility.
Applications must be renewed each year. Initial applications and renewals can be submitted online or by paper application through the NYC Department of Finance. However, the law passed in response to COVID-19 also applies to DHE. As such, 2020 DHE recipients are generally not required to renew their benefits this year.
Note: A homeowner cannot receive both DHE and SCHE. If the homeowner qualifies for both, the homeowner will receive SCHE.
Veterans and their family members may be eligible for the Alternative Veterans Tax Exemption and/or the Eligible Funds Exemption. The amount of each benefit varies, but the estimated savings based on fiscal year 2018 was $649 and $611 respectively. The specific requirements of each exemption can be found here. Applications can be submitted online or by paper application through the NYC Department of Finance.
School Tax Relief (STAR): Basic STAR and Enhanced STAR
The STAR program provides a property tax break for school district taxes for owner-occupied, primary residences. Eligible homeowners can receive either Basic STAR or Enhanced STAR.
Note: While STAR benefits will decrease property taxes for eligible homeowners, enrollment in any STAR program (Basic or Enhanced STAR, STAR Exemption, or STAR Credit Check) will not remove a property from the tax lien sale list.
Basic STAR is available to homeowners with a combined annual income of $250,000 or less for the STAR exemption, or $500,000 or less for the STAR credit. The tax savings are approximately $293/year. Enhanced STAR is available to homeowners age 65 or older with a combined annual income of $90,550 or less. All owners must be at least 65 as of December 31st of the year of the exemption unless the property is jointly owned by a married couple or siblings. If so, only one owner must be 65 or older. The tax savings are approximately $650/year.
In 2016, a state law changed STAR from a property tax exemption (STAR exemption) to an income tax credit (STAR credit check). This change affects how a homeowner receives their STAR benefit, discussed in further detail below.
The STAR exemption applies directly to the owner’s property tax bill. Notably, the STAR exemption is no longer available to new homeowners or to homeowners who did not have the exemption in the 2015-2016 tax year. As such, they may only receive a STAR credit check. A small exception exists for new homeowners, who may be able to receive a prior owner’s STAR exemption for the first year of new homeownership. After that period ends, eligible homeowner will receive a STAR credit check.
Homeowners may continue to receive the STAR exemption if the owner received the exemption for tax year 2015-2016 and continues to receive it, or if the owner had the exemption for tax year 2015-2016 and subsequently lost it. For the latter, homeowners may apply to restore their STAR exemption with the New York City Finance Department. The application can be submitted online or by paper application.
STAR Credit Check
The STAR credit check operates similarly to the STAR exemption, but the homeowner must register with the New York State Department of Taxation and Finance rather than with the NYC Department of Finance.
Instead of an exemption on their property tax bill, the homeowner receives a check in the mail each year. Eligibility is automatically reviewed each year, and the homeowner cannot opt to receive an exemption instead of a check. Unless there has been a change in ownership, the homeowner need only register once.
In sum, new homeowners, or any homeowners that did not receive the STAR exemption for the 2015-2016 tax year, must register with NY State by submitting an application online or by calling 518-457-2036. The application does not require any documents to be uploaded, but it is useful to have certain documents on hand when applying.
Note: A homeowner can receive both SCHE and STAR. Previously, homeowners who qualified for SCHE were automatically granted Enhanced STAR. However, due to changes in New York law, homeowners must apply separately for SCHE and Enhanced STAR.
If you think you are eligible for one of these property tax benefits and need assistance in applying or have questions, you can call the City Bar Justice Center’s Homeowner Stability Project helpline at 212-382-6766 or email HSP@nycbar.org for assistance.
This communication is for the general education and knowledge of our readers. Because all legal problems involve their own specific set of facts, this informational resource is not and should not be used as a substitute for independent legal advice. This informational resource also is not intended to create, and its receipt does not constitute, an attorney-client relationship. Please contact competent, independent legal counsel for an assessment of your particular legal concerns, or contact our Legal Hotline (212.626.7383 or https://www.citybarjusticecenter.org/legal-hotline/) to determine whether you qualify for assistance from the City Bar Justice Center.
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