According to nonprofit Tax Foundation, property taxes in the state of New York are some of the highest in the nation. However, it’s not the state that impose or benefit from the tax revenues. These taxes go to local governments, county governments and school districts. In fact, these taxes make up the bulk of the revenue for municipalities and school district services.
Why are Property Taxes Required?
To reiterate, in the state of New York, property taxes are just local taxes and are used by local governments. It’s used to finance things such social and civic needs, such as schools, fire and police departments, road maintenance, and other local government services. Having said that, the largest amount goes to the schools.
How Property Taxes Work in New York State
Tax is paid on all real property
In New York state, property tax is paid on all real property, or land and any structures on it, such as houses, mobile homes, apartment buildings, gas stations, office buildings, farms or vacant land.
Assessed at a uniform percentage each year
New York state law requires that the real property in each municipality (apart from New York City and Nassau County) be assessed at a uniform percentage of market value each year.
The assessment will be equivalent to a set percentage of market value, which is set by local assessors’ offices.
This assessed value is fundamental in determining your property tax, as they are fundamentally based on this value. Since properties in New York are assessed every every year, the property tax you pay changes every year.
Final assessment X local property tax rate = your property tax bill
As New York property tax rates are set by local governments, they vary by location.
Two tax bills per year
Over the course of a year, the vast majority of New York state residents are required to pay two property tax bill.
- Tax bill for schools and libraries: This arrives in September, following the finalization of the assessments.
- County, town taxes and other district charges: This one arrives in January,
Reductions and Exemptions
As your property tax bill is based on the assessment of your property’s value in New York state, property tax reductions are the result of a reduced assessment.
New York law allows local governments to offer exemptions for older adults, veterans, and the disabled.
Senior Citizen Exemption
Local governments and school districts in New York state can give senior citizens up to a 50% reduction in the assessed value of their property. However, you must be 65 or older to qualify, as well as be within a certain income bracket.
The counties, cities and school districts set their own limits, ranging from $3k to $29k. The limits are higher in NYC, and can be up to $50k.
Properties that are purchased by veterans from pensions, insurance settlements or bonuses can benefit from exemptions that reduce their assessments. Again, the conditions of each exemption are decided by each respective locality, and type of veteran. For example, veterans who served during wartime, during the Cold War, or who received a medal can also be given special exemptions corresponding with the nature of their service.
Exemptions for Disabled
New York state law provides exemptions for disabled persons with documented evidence of their disability. However, you must be within an income bracket, and meet the other local requirements. This reduction equates to 50% of the value of their properties.
School tax breaks are coined as STAR credits in the state of New York.
Eligibility requirements for STAR credits:
- You own a one, two, or three-family home, condo, cooperative apartment, manufactured home, or farm dwelling, and it is your primary residence.
- Your income is $500,000 or less.
The credit is sent each year in the form of a check. Keep in mind that this only refers to school taxes. There are also enhanced STAR credits for anyone 65 and older with an income of $92,000 or less (in 2022, anyways).
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