Change intended to eliminate fraud
By Derek Liebig
Homeowners who receive a Basic STAR exemption for property tax assistance will need to register with the state in order to continue to receive the benefit in 2014 and beyond.
The state Department of Taxation and Finance has taken administrative control of the state School Tax Relief Program application process.
Local assessors had previously been responsible for oversight of applications but the state for years has struggled with widespread fraud and abuse of the program.
A March audit found as much as $13 million in fraud and abuse.
The most-cited form of abuse is when property owners receive STAR exemptions on both their primary residence and a second home.
The change, which was included in the state’s 2013-14 budget, is meant to address some of those problems and eliminate inappropriate and fraudulent exemptions, state officials said.
By mandating that applications be registered with the state, officials will be able to check that information against the state database and can then inform local assessors if a person is receiving impermissible benefits.
“Local assessors monitor Basic STAR in their communities, but do not have the ability to know if an individual is receiving STAR in any of the other 1,000 localities statewide,” Thomas Mattox, commissioner of taxation and finance, said in a prepared statement. “This is the first registration in the STAR Program’s 15-year history, and it will eliminate inappropriate and fraudulent exemptions.”
Under the new policy, homeowners who receive the Basic exemption must register with the state tax department to continue receiving benefits next year and beyond. Seniors citizens who receive the Enhanced exemption will not be affected.
Homeowners receiving the Basic exemption will not have to re-register every year; the tax department will confirm an applicant’s eligibility in future years.
Homeowners applying for the exemption for the first time are also not affected.
Letters detailing the changes and providing instructions on how to apply will be mailed to all of the state’s 2.6 million Basic STAR recipients. Residents in Washington County should expect to receive a letter sometime next week.
The new changes went into effect on Aug. 19. The changes apply only to 2014 and beyond; it does not affect 2013 exemptions.
Anyone who fails to register by Dec. 31 will not receive the STAR exemption on local assessment rolls for the 2014 tax year.
Enacted in 1998, the STAR program is available to homeowners with an income under $500,000 a year. It exempts $30,000 of a home’s value from school taxes, saving the average homeowner $700 annually.
Hampton Supervisor David O’Brien said he re-registered online and described the process as “fairly simple,” and said it took less than 15 minutes.
Homeowners can re-register online at www.tax.ny.gov or by phone at 457-2036.