March 19, 2014
By: Ryan T. Emery
If you are a homeowner in New York State, you are undoubtedly aware of the Basic STAR Exemption Program, which provides you with a real property tax break.
Perhaps now you are retired and have moved to Florida (or some other warmer state) or are thinking about moving to Florida while keeping your former New York residence as your summer home. If so, it is critical that you take affirmative steps to remove yourself from the Basic STAR Exemption Program or you may lose your Florida Homestead exemption and possibly incur other penalties.
This is because under the Basic STAR program, you are certifying that the home the exemption applies to is your primary residence. Unfortunately, you cannot have your cake and eat it too – you can only have one primary residence. So if you declare Florida as your permanent residence, you no longer qualify for the Basic STAR exemption.
The main reason so many people overlook this is because the Basic STAR exemption is automatically granted once you have applied for it. This will also be the case for tax year 2014 and beyond where New York residents will now have to apply directly to New York State for the Basic STAR exemption instead of with their local assessor.
Since the exemption, once applied for, is automatically granted in subsequent tax years, it is rather easy for people to forget that they are enrolled in the program. Once you apply for the Basic STAR program, your local assessor and New York assumes the exemption applies for all future years until you inform them otherwise.
Do not think that New York or Florida will never catch the oversight. Florida has a primary residency requirement for its own Florida Homestead property tax exemption program that can lead to an investigation as to whether you have declared primary residency in another state (which is exactly what you are doing if you have not removed yourself from the Basic STAR program).
As of the writing of this article, New York State does not have an official form for removing a STAR exemption. All you need to do is write a simple letter using certified mail/return receipt requested, to your local assessor’s office informing them that your residency has changed and to remove the Basic STAR exemption from your New York property. This simple act will help you avoid New York State and/or Florida assessing serious tax penalties against you.