2019 STAR Changes May Adversely Affect Homeowners This Fall

ALBANY, NY (05/30/2019) (readMedia)-- Changes included in the state Budget adopted in April will cause homeowners whose annual income is between $250,000 - $500,000 to lose their STAR Exemption, which comes in the form of a reduction reflected on their school tax bill. Those affected homeowners instead will receive the STAR Credit in the form of a state issued check mailed to them at some point after the school tax bills are sent.

The state Department of Taxation and Finance is sending letters to homeowners affected by this change to notify them they will automatically be registered for the STAR credit, if they can verify their income. If income cannot be verified those property owners will receive a letter asking for more information so their STAR credit can be processed.

Under the new state budget, homeowners will continue to receive the STAR Exemption reduction as long as their annual household income is less than $250,000.

"Property taxpayers should be extra vigilant this year to insure they do not lose out on their STAR savings due to all the changes enacted the state Budget," stated Michael J. Borges, executive director of the Association of School Business Officials of New York.

The immediate adverse effect of switching from an exemption reduction to an exemption credit is the impact on homeowners that use an escrow account to pay their tax bill. Many escrow accounts will generally be underfunded because now this Fall they will be paying the full amount of the tax bill where in the past the amount paid reflected the STAR exemption reduction. Those affected are urged to contact their mortgage lender to make arrangements to address the shortage in their escrow account.

"It's important for taxpayers who are being switched from the STAR exemption to the STAR credit to contact their escrow companies," Rochelle Harris, president of the New York State Assessors Association, said. "This action could adversely affect property owners who aren't prepared for this change."

Additional information about these STAR changes can be found at the NYS Dept of Tax and Finance's website here: https://www.tax.ny.gov/pit/property/star/default.htm