Two new measures were approved by the New York State legislature
that will change the way the Star Rebate Program works.
Part 1: Homeowners earning between $250,000 and $500,000 a year will get a check for their STAR rebates this year, rather than receiving the savings directly in their school-tax bills.
Part 2: Any STAR recipient that doesn’t switch to a check will miss out on the two percent increase in their tax savings this fall.
The changes won’t impact eligibility – just whether homeowners receive the rebates in a check or in their school-tax bills, and not everyone will feel the change.
Those who owned their homes before Aug. 1, 2015, and earn less than $250,000 a year, will still get the STAR savings in their tax bills unless they opt for the check.
If property owners want to switch to the STAR credit program, the New York State Department of Taxation and Finance suggests that they register as soon as possible, and no later than two weeks prior to the date when the final assessment roll is published.
A spokesperson for the tax department said the system is working well and that homeowners should feel confident they will get the checks prior to when their school taxes are due.
Last year, the agency said it issued 99.5% of STAR credit checks prior to the school tax bill due date.
The School Tax Relief (STAR) program is a property tax rebate program available to New Yorkers whose household income is $500,000 or less – only primary residences are eligible. Around 2.6 million homeowners in New York receive the STAR tax break, which averages to around $790 per year per household.
The tax break is part of a $3 billion program that started in the mid-1990s, which helps New Yorkers curb the impact of having among the highest school taxes in the nation.
Why the Changes?
Under the previous system, schools give homeowners the STAR savings and then get reimbursed by the state — which showed up as a budget expense for the state. The new system gives the savings directly to the homeowners in a check, so it counts as a “personal income tax credit,” and shows up in the state budget as a reduction in tax revenue – not as state spending.
That change is sizable for the state’s finances. The new system is estimated to lower spending by $238 million in the fiscal year. Plus, capping the growth in the program for those who don’t get a check is another potential money-saver for the state.
Critics have asserted that the STAR program’s alterations have created falsities in the state’s budget by changing how the program functions, from a homeowner’s property tax discount to a state-issued ‘personal income tax credit’ that is issued as a check. According to an article in lohud. the Director of State Studies for the Citizens Budget Commission, David Friedfel asserts “the state is able to artificially make state spending appear lower than it is.”
The state defended the changes, however, saying it will help cut out fraud in the program and streamline payments. The goal of the changes, as explained by Freeman Klopott, spokesman for the state Budget Division, is to transfer people to the credit program, which is more efficiently administered. This will help to prevent abuse of the system. It will also separate the STAR savings from the tax bill, making districts more accountable to taxpayers.
What About Mortgage Escrows?
The changes will impact homeowners who pay their taxes through a mortgage escrow because they will pay more per month to cover the taxes, and then have to wait for reimbursement through the STAR check.
Are Seniors Affected?
Senior citizens who get Enhanced STAR are not impacted by the changes and will still get the savings upfront on their tax bills although those receiving Enhanced STAR will now have to enroll in an income-verification program to get the rebate. Enhanced STAR is available to homeowners age 65 and older with incomes of $86,300 or less. This program benefits 665,000 seniors and averages $1,400 a year.
For more information on the STAR program or to register, please visit https://www.tax.ny.gov/pit/property/star/default.htm.
Nassau County residents have many questions that need to be answered regarding the new county-wide assessment
. Since 2011, Nassau County’s tax rolls have been frozen and the town has recently decided to pursue a property reassessment for its current residents.
People have been taking advantage of challenging their property taxes, and the county is having trouble keeping up with the payouts; the county has therefore borrowed hundreds of millions of dollars.
Laura Curran, a county executive, states that the reassessment is necessary because it will allow the county to have up-to-date accurate records when appearing in court for a tax grievance.
When the reassessment occurs, it is estimated that 52% of residents will see a property tax decrease and 48% will have a tax increase.
Nassau County will learn what changes have occurred to their property taxes once the county has mailed out notices. The letters also contain information regarding 2017-18 taxes for local schools and other entities, and also include an estimate for 2020-21 county taxes.
David Moog, a Nassau County Assessor, states that more homeowners will see their property value rise since becoming frozen in 2011. Moog also states that homeowners are more likely to see an increase in their taxes if they have filed for tax grievances over the years. This means that tax bills will not necessarily rise in accordance with property value. The reassessments will also vary greatly by the school district.
What is the purpose of the reassessment?
The county reassessment, which will impact 400,000 residential and commercial properties in Nassau, will take effect in the 2020-21 tax year. Nassau County officials from both political parties agree that the new reassessment is needed.
Nassau County struck deals with third-party companies in order to reassess properties in the county. These outside companies ultimately found that the current property taxes were too low for the present market values.
Why are the reassessments important?
Due to the ability to file tax grievances, homeowners have changed the county’s tax burden significantly. Those who have successfully won tax grievance cases have created an uneven tax weight for the rest of Nassau’s residents. A current reassessment will help level the playing field once again.
How will the reassessment affect Nassau’s residents?
The majority of Nassau’s residents will experience changes to their annual property taxes. With the new reassessment, it is estimated that 48% of residents will experience an increase and 52% will experience a tax reduction. Most homeowners that will see the largest increases will be those that have listened to their county officials and filed past tax grievances. Essentially being punished for doing what the county instructed them to do.
Nassau County officials project that 39,000 residents will see an increase of $3,000, while 33,000 will see a decrease of $3,000. Approximately 11,000 residents will experience an increase of $5,000, while 10,000 residents will see a reduction of $5,000.
Tax Impact Notices, which the county has provided to Nassau residents, show the 2020-21 tax projections.
How has the level of assessment changed?
Nassau County executives signed the reassessment in March. According to New York’s statewide law, the first year of assessments are capped at 6% and then the cap increases to 20% for the following five years.
Republican parties in Nassau have accused Curran of going back on her promise to adhere to a bill that would have had lower changes in annual tax rates for residents, including those who have successfully filed challenges. Democratic parties have also blamed Curran for hurrying into a reassessment that increases tax percentages for county residents.
The Taxpayer Protection Plan
The Taxpayer Protection Plan, which was proposed by Curran, would phase in the new tax bill. Essentially, homes would reflect the assessed market value by the fifth year of implementation. This plan would also moderate tax increases, but also slow down decreases for other homeowners.
What do homeowners think?
Residents who challenged their property taxes multiple times over the years are more likely to experience annual tax increases compared to those who have not.
There are many homeowners that are upset about the increases in property taxes. These taxpayers have hired tax grievance companies and have fought long and hard for reductions, and feel the new bill will counteract their efforts.
Supporters of the reassessment state that it is crucial for the homeowners who have been unknowingly overpaying for annual taxes to get on an even playing field. The frozen tax rolls have allowed for some residents to grieve and pay less, while others are stuck paying more than their home is valued.
Curran believes she is one of the only Nassau County executives to face the problem head-on. She blames the previous administration and lawmakers, as well as tax grievance firms for allowing the problem to occur.
What problems have officials faced so far?
Tax impact notices for county residents that were posted online had to be corrected because the assessor used preliminary, and not final, values. The administration was able to correct this error under Curran’s authority.
Nassau County only allows for a 6% increase in the first year of reassessment, and many tax impact notices were incorrect in this regard. Those, too, were corrected by county officials.
Stating it was normal to make corrections after homeowners received tax notices, Moog worked to correct approximately 20,000 tax disclosure notices after errors were found.
What happens now?
January 2nd is the tentative date for the release of the new tax impact notices. Residents have until April 30, 2019, to file appeals. After the appeals have been received, the county will review the tax rolls and publish a final tax roll in April of 2020.
Setting financial goals is a crucial part of maintaining a healthy relationship with money. For a homeowner, this is especially evident. Owning a home is a huge, important investment, and all homeowners should be aware of the smart financial money moves they should be making.
Without realizing it, your home could play an important role in achieving your financial goals. The following tips can help you make smart money moves when it comes to your home!
Focus on the loan principal
When you make a payment on a mortgage loan, you are paying both principal and interest. By making an extra payment, you have the ability to shave around seven years off of a 30-year mortgage.
When making the extra payment, be sure to specify that you are intending on putting money toward the loan principal. This is especially important to do when nearing retirement since eliminating the largest monthly bill will lessen the financial stress when receiving a fixed income.
Consider refinancing your mortgage terms
Mortgages are available in different terms – including 10, 15, and 30-year loans. Refinancing can possibly lower your interest rate on the overall loan. If interest rates were significantly lower when you originally obtained your mortgage, you may not see a great difference in interest payments; if the interest rate is lower today, your interest payment may be much lower than before.
Be aware that while refinancing may save you money in interest since you are compressing your mortgage into a shorter term, you will likely have a higher monthly principal payment. You will save money in the long run but will be paying more on a monthly basis.
Compare insurance rates
Fortunately, insurance rates are not set in stone and can always be changed. That means that comparing homeowners insurance is strongly recommended in order to find the rates that work best for you.
You can generally find savings if you bundle insurance together, such as homeowners insurance and auto insurance. Depending on your provider, you can bundle all of your insurance needs with one company and receive a discount. Raising the amount of your deductible can also save you around 25% on insurance premiums.
Some insurance companies also provide discounts for home improvements, including security systems and changes made to protect against natural disasters. Shopping around yearly for homeowners insurance can ensure that you are receiving the best deal for the current state of your home.
Review your property tax assessment
Property taxes are determined by county assessors. Since market values are constantly changing, property taxes increase and decrease from time to time. This means that your home’s value may be higher or lower than the county’s current assessment.
If you believe your home is not worth what the county has previously assessed it for, and feel you are paying too much in property tax, you can challenge your taxes with local grievance firms.
Check out what homes in your neighborhood are being sold for so you can get an idea of the tax rates in your area. Property values are available to the public and can be found online. Once you have decided to challenge the property tax assessment, contact a local grievance firm to assist in your tax challenge.
Invest in remodeling your home
It is no secret that remodeling has the ability to increase the value of your home. Not only can you create an environment that is personalized to your taste, but updated renovations also create a higher value property.
Remodeling a home does not come cheap, so be sure to renovate areas that will provide the greatest return on investment. Explore funding options, including but not limited to home equity loans and personal loans. Depending on what you need, many funding options are available and can be compared with the help of a reliable lender.
Consider investing in an income property
In today’s era, rental properties and Airbnb’s are quite common for both renters and landlords. The possibility of creating an extra income through a rental property can become a reality in 2019. With solid credit scores, low debt, and consistent income, purchasing a second property to generate additional cash flow is a great way to increase financial security.
Low market rates make taking out a second mortgage possible for many people. You can generally find better deals on properties during the off-season when they are not in demand and are lower in cost.
Formulating a better financial game plan for 2019 can help you achieve your money goals. Creating targets and tracking progress is key to becoming successful, and your home can be used as an important tool in building financial wealth. Follow these tips to utilize your homeownership to your advantage.
Property tax is a tax levied on real estate and occasionally, on other property, you own as well. The amount of property tax you owe is usually assessed by your local government and is based on both the location of the property and its value.
How to calculate property tax
Property tax is determined by multiplying the value of the property by the tax rate. Here’s how the value of your property and it’s given tax rate are determined:
The Value of the Property
Assessors, also called appraisers, are people who work for the local tax authorities, tracking the value of every piece of land and or property in their district, be it in a city, county or otherwise.
These appraisers maintain databases of the tax value of the property, which are typically less than the market value of the property. This is a common practice to keep tax rates more manageable (think: the higher the value of the property, the higher the associated taxes will be), although how much less will differ by area.
Your home’s value is often tracked using sophisticated mapping software that takes into account permit applications for remodeling projects, rental contracts, recent inspections, changes in resource use, reports from neighbors and more.
Cars, machinery, and other property may be subject to personal property tax as well.
The Tax Rate
Property tax rates are based on something known as the “millage rate,” which is the amount per $1,000 of property value used to calculate local property taxes. Your property tax rate is likely to be expressed in a number of “mills,” where one “Mill” is equal to one-thousandth of a dollar.
For example: if the property tax rate on homes is 15 mills, homeowners in that area will pay $15 in tax for every $1,000 in assessed home value. Thus, a house that’s valued at $200,000 will owe $3,000 in property taxes.
Some taxing authorities apply the property tax rate only to a portion of the home value, rather than to the full home value, greatly reducing the amount of property tax owed. In the end, it’s up to the local taxing authority to determine the tax rate.
What property tax pays for
Your property taxes generally go to the local government and are used to pay for community services such as schools, police and fire departments, road construction and other locally-based projects.
Like all citizens, you’re responsible for paying your property taxes in full and on time – failing to do so can result in the authorities placing a tax lien on your property.
While it’s not a seizure of assets (no one will take your house,) A tax lien claims part or all of the proceeds from the property should you ever rent or sell it. If you’re in the market for a new home, check with your local tax office to ensure that there are no tax liens on the property prior to purchasing it, as some states this financial responsibility can be passed onto the new owner.
How to dispute your property tax bill
If you disagree with a property tax bill on your home, your best bet is to challenge your home’s assessed value. In order to do this, you’ll need to prove that the assessed value of your home, doesn’t reflect it’s property’s true value.
If you choose to take this route, start by Gathering comparable listings or ask a real estate agent to pull records of comparable property sales for you. Or, you can look at the property tax value of other local homes, which are frequently available online from the local tax assessor.
Then, call your assessor’s office to learn how the dispute process works in your area. Start by discussing your findings by phone or in person, using homes that have a similar tax value or higher than yours.
You also might be able to pursue the case with an independent tax appeals board should working directly with your tax office not give you the results you’re looking for.
How to pay property tax
Typically, there are two ways to pay property tax on a house:
- Write a check or pay online once a year (or once every six months) when the bill comes from the taxing authority.
- Set aside money each month in an escrow account when you pay the mortgage.
Don’t assume you’re paying property tax when you give money to the escrow company. Think of that as “saving up” for the property tax bill. The escrow company uses the money in your escrow account to pay your property tax when the bill arrives.
How to deduct property tax on your tax return
Property tax can be tax-deductible. Use Schedule A when you file your return to figure your deduction amount.
In 2018 a new limit on property tax deductions was announced. Now, you may deduct up to $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes.
if you want to deduct property tax, you’ll need to itemize your taxes instead of taking the standard deduction. This will most likely take you more time, however, it often leaves you with a lower tax bill, making it well worth the effort.
Nassau County’s Assessment Disclosure Notice has been sent out to the residents facing potential real estate tax changes. These changes will affect the 2020-21 tax year and should be thoroughly understood by every county resident.
The county used comps, or comparative recent sales in your neighborhood, to perform the reassessments. The level of assessment was reduced by 60%, from 0.025 percent to 0.010 percent.
An example of the way the new assessment works is that if your home was fully assessed at a worth of $300,000, the total assessment would be $750 ($300,000 x 0.0025). The $750 value would be multiplied by the tax rate of $100 per assessment. Presumably, a tax rate of $2,000 per $100 of assessed value would bring your taxes to a total of $15,000.
With the new assessments in place, the same home will have a market value of $900,000. The new level of assessment, .10 percent, brings this home’s taxable value up to $900. With the same $2,000 tax rate per $100 ($900,000 x 0.001), the properties new real estate taxes top in at $18,000.
The Nassau County tax impact letter, including the newly assessed values, will contain the actual real estate taxes you will owe. The impact notices and comps used to assess the property values became available online on November 21st. Tax impact disclosure notices and assessment disclosure notices were sent together, via mail, by the county.
Per New York State law, a home’s assessed value cannot be increased by more than 6% per year. Nassau County will be overlooking this law during this reassessment period. In order to minimize the impact of a potential tax increase, Nassau County may defer real estate taxes over a five-year period.
The 2017/18 tax year will be used as a basis for any potential deferment. If you have previously filed a tax grievance and have had a successful tax reduction for the 2018/19 or 2020/21 years, Nassau County will not be using that information for deferment purposes.
The market value assessment in Nassau County has increased by around 3 times, whereas the level of assessment has decreased by 60 percent. Those who have successfully filed for tax grievances will potentially see a 15 to 20 percent increase in real estate taxes, compared to the 2017/18 years. Without taking a possible 5-year deferment plan into consideration, your real estate taxes could increase by 50 percent with the newest assessment.
There will be winners and losers in Nassau County in regard to the reassessments. Additionally, a federal law went into effect in 2018 limiting state and local tax deductions to $10,000 and increasing mortgage rates.
In order to protect your rights, consider using a tax grievance firm for both residential and commercials properties. Challenging the reassessment can be done on your own – just be sure to be aware of your rights and the deadlines associated with filing tax grievances.
Useful Tax Grievance Links for Nassau County Residents:
Nassau County homeowners are experiencing an increase of irritation and skepticism amidst receiving tax impact statements both in their mailboxes and online. These property reassessments, made by the county, detail possible increases in property value for over 50% of homeowners.
Sent out November 1st, tax notices revealed the new assessments to all county residents. Estimated tax bills were also published online on November 20th. These property tax changes are expected to take effect in 2020-2021.
The uproar over the property tax increase has been tremendous – residents have been contacting county officials in the assessment department since 2010 and county meetings open to the public have become filled with concerned residents. The Nassau County website has also hit 11 million in views November, nearly doubling the view count from October.
Due to failed attempts to fix over-assessments by the counties, numerous tax grievances have been settled. These settlements have caused homeowners, who have not filed tax grievances, to bear the weight of the property tax issue.
Legislator Steve Rhoads (R-Bellmore) stated that residents feel “betrayed” and that homeowners have “been encouraged to participate in the grievance process”. Rhoads went on to say that property owners feel “as though they’re being punished for doing what the system was set up to tell them to do”.
Democrat County Executive Laura Curran, who encouraged the reassessment process of the counties homes, states she has found support with many of Nassau’s residents. The County Executive says that the reassessment will help the county decrease the amount of borrowing it needs to do in order to keep up with the successful tax challenges in court.
Toward the end of 2017, Nassau’s tax liability measured in at a whopping $569 million. In order to ease this financial responsibility, the county plans on borrowing upwards of $300 million dollars. Curran states that without the reassessment, the county will get “deeper into debt”, which the entire county will then have to appease.
Curran lowered the level of assessment from .25 to .1 percent starting in September. Controversy has risen over this recent change of market value used to calculate tax costs for homeowners.
According to county-provided data, Curran’s reassessment program is expected to see a tax increase for 52% of homeowners and a decrease for 48% of homeowners. With these changes, upwards of 11,000 residents will have increases of more than $5,000, while approximately 39,000 residents will see an increase of around $3,000.
A potential hike in property taxes could mean trouble for the housing market in the counties affected. Potential homebuyers factor in costs associated with buying property, including its yearly taxes. A higher tax rate could deter potential buyers from both personal and commercial property in Nassau.
With the negative responses stemming from impending tax increases, Nassau County Assessor David Moog has sent four new tax specialists to meet with residents and address their concerns. The offices have experienced quite a bit of traffic – 14,000 residents have either called or emailed and 4,000 people have physically visited the locations.
Meris Davis, a tax specialist working in one of the offices, said that her experience with resident feedback has been positive. She states that homeowners leave the office feeling informed, not with “the wool pulled over their eyes”.
Nassau County is showing residents the new market values of their properties. The reassessment notices also show the homeowners their 2017-18 taxes and tentative 2020-21 taxes.
Moog states that more homeowners will see their homes market value rise, after many years of fixed assessments. According to the County Assessor, this doesn’t necessarily mean that the property taxes will rise, as well. He states that residents that continually filed for tax grievances throughout recent years will face the largest increase.
Bottom line, we have interviewed hundreds of Nassau homeowners and commercial property owners who have attended meetings at one of the many Nassau Assessment satellite offices regarding the tax impact notices that they have received. What are those property owners advised to do by Nassau Assessor’s Office you ask? They are advised to file a tax grievance.