Giving up a STAR exemption

Property owners with STAR exemptions may wish to stop receiving the exemption for various reasons. They should bear in mind, however, that the decision to give up a STAR exemption is irreversible. This includes property owners who switch to the credit; they cannot switch back to the exemption at a later time.

Switching to the STAR credit

Property owners who wish to switch to the STAR credit from the STAR exemption can do so by registering for the STAR credit. (They are not required to “renounce” the exemption.)

If the property owner registers after the deadline but on or before December 31 of the year of the credit:

• the exemption will be left in place for the year when they register, and
• if the STAR credit is worth more than the STAR exemption, the difference will be added to their STAR credit in the following year.

Giving up the STAR exemption for other reasons

Some property owners with STAR exemptions may wish to stop receiving the STAR exemption without switching to the STAR credit. (They do not wish to receive a STAR exemption or a STAR credit.)  The removal procedure varies based on when the property owner asks for the exemption to be removed.  In some cases, a simple request will suffice; in others, a formal “renunciation” of the exemption may be required.

Property owners who wish to give up their STAR exemptions without switching to the STAR credit should follow the procedures described below.

Removal and renunciation procedures and scenarios

• Removal before the tentative roll is filed for reasons other than switching to the STAR credit
• Renunciation after the tentative roll has been filed (including prior year exemptions) for reasons other than switching to the STAR credit
• Scenarios

Removal before the tentative roll is filed for reasons other than switching to the STAR credit

If a property owner with a STAR exemption wishes to stop receiving that exemption in the future only and the tentative assessment roll has not been filed, the property owner does not need to file Form RP-496 or any other specific form. (Form RP-496 is designed to be used to renounce previously granted exemptions, as its title indicates.)

Unless the request affects any roll that has already been filed, the property owner or owners can simply provide the assessor with a brief signed note expressing their intention to give up the exemption going forward. We suggest language along these lines:

Please be advised that I (we) no longer wish to receive the STAR exemption from this point forward on my (our) property located at

_______________________________________________

(Property's address)                               

Date ______________ Signed _______________________

Date ______________ Signed _______________________

All owners should sign.

However, if Question 3 of Part 1 of a taxpayer’s Form RP-496 contains a date that falls after the school levy date, it means that the taxpayer did not intend to renounce the exemption for this year’s school tax bill.  You should not remove the exemption from this year’s data file in those cases.

Renunciation after the tentative roll has been filed (including prior year exemptions) for reasons other than switching to the STAR credit

After the tentative assessment roll has been filed, property owners who wish to give up their STAR exemptions without switching to the STAR credit must “renounce” their exemption using Form RP-496, Application to Renounce Previously Granted Exemption(s). The same procedure applies for exemptions granted in prior years.

Form RP-496 instructions

Where and when to file

Property owners file Form RP-496 with the county director of real property tax services, or in Nassau or Tompkins Counties, with the chief assessing officer (this form does not apply to real property located within New York City). The application must be filed no later than ten years after the levy of taxes upon the assessment roll on which the renounced exemption appears. Property owners cannot file the form with the New York State Department of Taxation and Finance or the Office of Real Property Tax Services.

Calculation of amount owed

The county director, after consulting with the assessor when appropriate, computes the total amount owed by the property owner. For each assessment roll for which a STAR exemption is being renounced, the director determines the “tax savings” the property owner received as a result of the STAR exemption. The director then adds interest at the rate prescribed by Section 924-a of the Real Property Tax Law, or by such other applicable law, for each month, or portion thereof, since the levy of taxes upon such assessment roll.

In addition, the taxpayer must pay a fee of $500.

Notification

After entering the amount owed in Part 2 of the application, the county director:

• returns the application to the property owner,
• sends a copy of the application to the assessor¹, and
• in the case of a STAR exemption, sends a copy to the New York State Department of Taxation and Finance at this address:

NYS DEPT. OF TAXATION AND FINANCE - ORPTS
WA HARRIMAN CAMPUS
ALBANY NY 12227-0801
ATTN: STAR RENUNCIATION UNIT

Distribution

The property owner must pay the total amount due to the county treasurer no later than 15 days after the notification is mailed to the owner by the county director. The treasurer then issues a payment receipt to the property owner. After deducting the $500 processing fee (if applicable), the treasurer distributes the taxes and interest owed to the affected municipal corporations, and, in the case of the STAR exemption, to the Tax Department.

_________________
¹ Note: If the assessor receives an approves copy of Form RP-496 before school taxes are levied, the assessor should remove the exemption from the assessment roll data file. It is not necessary to file a Correction of Errors petition in these cases.  If the assessor receives an approved copy of Form RP-496 after school taxes are levied, he or she may leave the exemption on the assessment roll data file.

Scenarios

Scenario 1.

Ms. Smith is eligible for the Enhanced STAR benefit. She purchases a new home after taxable status date.  The prior owner was receiving the Basic STAR exemption.

Ms. Smith will automatically receive the Basic STAR exemption on her new home in the first year. If she wishes to receive the Enhanced STAR benefit instead, Ms. Smith should register for the STAR credit with the Tax Department before the end of the calendar year, and choose the Make the Switch option as she begins the registration process.

Since she is switching to the credit, she does not need to renounce her exemption. If it is too late to receive the Enhanced STAR credit instead of the Basic STAR exemption this year, the difference between the two benefits will be included in her STAR credit the following year.

Scenario 2.

Mr. and Mrs. Jones purchased a new home after taxable status date; they were receiving the Basic STAR exemption on their prior home. The prior owner of the new home was receiving the Basic STAR exemption.

In the first year, the Jones will receive the prior owner’s Basic STAR exemption on their new home. They are not required to renounce the exemption on their prior home. When the new home becomes their primary residence, they should register with the Tax Department to receive the STAR credit in future years.

Scenario 3.

In April, Mr. and Mrs. Jacobs decide they would like to stop receiving the STAR exemption on their home; their out-of-state home is going to become their primary address.

Since their NYS home is located in a town where the tentative assessment roll has not yet been filed, they should submit a signed note to the assessor asking that the exemption be removed (see Before the tentative roll is filed). If, however, they wait until after the tentative roll is filed, they will need to submit Form RP-496, Application to Renounce Previously Granted Exemption(s).