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2009 STAR Program Update (part 2)

2009 STAR Program Update (part 2)

The base exemption amount directly tied to property tax bills will remain unchanged to ensure that direct property tax relief, which is the core purpose of the program, will be preserved.

Major Initiatives

Gap-closing actions include:

* Eliminate STAR Rebate Program. This budget returns STAR to its original form and purpose by preserving the basic exemption as well as the enhanced exemption for senior homeowners on limited incomes but eliminating the STAR rebate. Under this action, no homeowner will be denied the basic or enhanced exemption they currently receive. Moreover, total program costs would be 29 percent above 2001-02 levels, the first year that STAR was fully phased-in. (2009-10 Savings: $1.4 billion; 2010-11 Savings: $1.6 billion)

* Decrease NYC STAR Credit Amounts to Pre-Rebate Levels. Consistent with the reduction of STAR benefits to pre-rebate levels, the New York City PIT refundable credit amounts will be reduced to $125 for married/surviving spouses and $62.50 for others. These reductions return STAR to the benefit structure that existed before property tax rebates and corresponding NYC credit increases were first authorized in 2006-07. (2009-10 Savings: $112 million; 2010-11 Savings: $379 million)
* Increase the Maximum Annual Reduction for STAR Exemptions. The maximum reduction in STAR benefits that can occur as a result of changes in assessed value or market value is increased from 11 percent to 18 percent. This action, which will make exemption amounts less disparate between communities regardless of rising local real estate markets, will affect approximately 1.6 million property owners. (2009-10 Savings: $109 million; 2010-11 Savings: $109 million)
* Permanently Shift December Payment for NYC STAR to June. This action shifts payment to another date within the same New York City fiscal year, and has no impact on New York City’s financial plan. (2009-10 Savings: $20 million; 2010-11 Savings: $27 million)

I hope this summary/update can be of use for you in dealing with your clients.  If you have any questions about the STAR Program, the budget or government affairs issues in general, do not hesitate to contact me.

2009 STAR Program Update (part 1)

History/Overview

STAR was enacted in 1997 to offset rising property taxes experienced by homeowners and to provide additional targeted property tax relief to senior citizens. Over time, the scope of the program was expanded by raising the Enhanced STAR income eligibility threshold, and by increasing the size of the Enhanced STAR exemption. In addition, a local property tax rebate program was enacted in 2006-07, then restructured as the Middle Class STAR rebate program in 2007-08 to target benefits based on income.

The original STAR program consisted of four separate initiatives created to provide local property tax relief:

* Basic STAR provides savings to residential homeowners by exempting the first $30,000 of the full assessed value of their primary residence from school taxes.
* Enhanced STAR provides a more generous benefit to residential homeowners age 65 years or older with incomes below $73,000 by exempting the first $60,100 of their primary residence from school taxes.
* The STAR Rebate was an expanded property tax relief program that provided a tax rebate check directly to homeowners who also receive the STAR exemption. Rebate amounts for Basic STAR recipients were income-based.
* New York City STAR supports tax relief through the income tax for more than 3 million New York City residents. Under the program, City residents who file a personal income tax (PIT) return receive a flat refundable credit and a 6 percent City tax rate reduction.

2009-10 Budget Actions

According to the Governor’s office the STAR program, in its current configuration, has become unsustainable. After recommended savings actions, which include eliminating the Middle Class STAR rebate, STAR tax relief would total $3.25 billion in 2009-10. This is approximately the level of funding provided before the creation of the rebate program.

Understanding Canandaigua Real Estate Taxes

Many homeowners do not understand much about Canandaigua real estate taxes and for this reason can end up in the position of losing their homes. Real estate taxes or property tax is normally calculated on the land value, the location, the county laws, and other factors. Canandaigua Real estate taxes are utilized for the upkeep of roads and other public services like emergency services and other municipal services enjoyed by the local residents. Real estate taxes are also in one way limited to the United States alone but for almost every country worldwide as well. Other names used for real estate taxes are rates and land levies and every homeowner will have to pay them.



How Much in Real estate taxes must I pay?

Real estate taxes are assed according to the sale value of your land or home. Rates are likely to be reassessed each year and normal inflationary increases and land values mean that your real estate taxes will increase with them. There are strict laws in place to ensure that these real estate taxes are paid and if you fall behind you are likely to even lose your home. The bill of rights requires that your property tax bill shows your assessment value of the property and the percentage of the how the figure has been arrived at. Real estate taxes can change according to the local municipal needs and area upgrades that need financing so your real estate taxes can change at any time in relation to municipal budgets.

Do I benefit from Real estate taxes?

Everyone benefits from real estate taxes because this money is used to the good all of all residents. In addition to this there are certain IRS benefits for real homeowners as well. Homeowner, are entitled to deduct payments of real estate taxes that they are paying on their property if you claimed for itemized deductions on your tax return. The IRS allows you to deduct real estate taxes on your main home as well as on any other homes and real estate you own. There are no also limits on the dollar amount of real estate taxes you can deduct either so this is certainly beneficial. For real estate investors with multiple properties and homes, there are also no limits on the number of these houses or properties for which deductions can be claimed for in real estate taxes.

How is Real estate Taxes paid?

When you pay monthly mortgage payment to a bank or financial institution holding your mortgage then the amount generally includes the real estate taxes that have to be paid on your property. The bank or mortgage holder pays these real estate taxes to the proper taxing county authority on their due dates. When your real estate taxes are included in your mortgage payments then you may claim an IRS deduction only in the tax year you actually pay your real estate taxes. You will find the real estate taxes paid for the year on the statement than the bank or mortgage lender gives you on the end of the year mortgage statements.

No Canandaigua Home Regrets

Buying a new Canandaigua home is great!
You get to choose where your home will be built, add a sun room here, third garage bay there and before you know it you are moving into your dream home. With all the options to choose from it is very easy to overlook crucial elements to your new home buying experience that could cost you greatly in both time and money.

Choosing upgrades with the lowest ROI or too many upgrades, period. - This is truly the most common mistake made by new home buyers who don’t consider the resale value of their home in the future. When buying a new home be sure to stick with the essential upgrades like two sinks in the master bathroom, high quality cabinetry and above all else, top quality padding under the carpeted areas.

Not examining your lot choice thoroughly enough. Some very important aspects to choosing a lot for your new home to be built on. Among them are: terrain, noting that people psychologically feel more secure looking down at the street rather than up, location and lot shape which can affect your surroundings including the possibility of facing the rear of a neighbor’s home.

Finding communities first, vitals second. - When you are buying a home you have to shop differently than you would if you were buying a car or shopping for clothes. To save yourself much heartache and frustration, be sure to hammer out your lifestyle requirements before even searching for a community to build a home in. For example, if you commute to New York City and have school age children you would want to find a school district that you approve of in an area with multiple mass transit options (train, bus, highway) and then locate new home communities within close proximity to both.

Overlooking the “inspection” clause in builder contracts. - A dirty little secret in the new home industry is the fact that some builders, national builders included, send out contracts with a clause stating that they don’t allow home inspections by an independent, third party home inspector until after you close on and own the home. They offer to do a walk through of the home with you before you close but chances are, unless you are a licensed home inspector with many years of experience, you won’t notice any red flags beyond the superficial.

Not using a buyer agent. - When looking for a new home, be sure to find a buyer agent who specializes in new homes. There are numerous important steps when buying a new home that a new home buyer agent will be prepared to work with such as price negotiation, lot choice, researching future development around the community and the pros and cons of building materials your builder will use in the construction of your new home. At present, the buyer agent’s services are paid for out of the builder’s marketing budget.

Buying a new Canandaigua home is a wonderful, dazzling experience that will cater to your every need. By using reasonable care and professional guidance you will enjoy many great years in your new home and reap substantial rewards from your diligent buying efforts when selling your home in the future.

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