What's happening
This bill requires homebuyers who are not eligible for the enhanced STAR tax exemption to reimburse municipalities for the tax difference at closing.
Why it matters
Shifts financial responsibility. The bill requires homebuyers who are not eligible for the enhanced STAR exemption to pay municipalities for the property tax benefit the previous owner received, ensuring local governments do not lose revenue when a home changes hands.
Affects closing costs. Buyers who do not qualify for the enhanced STAR exemption will face higher up-front costs at closing, as they must reimburse the tax difference immediately rather than over time.
Targets fairness in tax benefits. This measure prevents new owners from indirectly benefiting from a tax exemption they are not qualified for, aligning tax bills more closely with current eligibility.
Impacts home sale transactions. Real estate agents, attorneys, and buyers will have to account for this reimbursement in sale negotiations and transaction planning, possibly affecting the marketability and timing of property sales.
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Who cares
Homebuyers ineligible for enhanced STAR
Buyers of properties carrying the exemption would have to pay the municipality the prorated difference between the seller’s tax liability and their own.
Municipal tax officials
The bill would require purchasers who do not qualify for enhanced STAR to make the municipality whole for the difference in tax liability at the time of sale.
Homeowners selling properties with enhanced STAR
Sales to buyers who do not qualify for the exemption would trigger a prorated tax payment obligation for the purchaser.
Headline styles
Close STAR Tax Loophole
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to aging
- Referred to aging
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
699
2017-2018 Regular Sessions
IN SENATE
January 4, 2017
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Aging
AN ACT to amend the real property tax law, in relation to certain calculations for enhanced STAR
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 9-b of section 425 of the real property tax law is amended by adding a new paragraph (e) to read as follows:
(e) Notwithstanding the foregoing provisions of this subdivision, at the time of sale of a parcel of real property with the enhanced STAR exemption, if a purchaser is not entitled to such exemption, then such purchaser shall make the municipality whole by paying the difference between the seller's tax liability and that due from the purchaser based on such purchaser's tax liability. The purchaser shall pay the pro-rated portion of the non-enhanced STAR exemption tax liability.
§ 2. This act shall take effect immediately; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date is authorized and directed to be made and completed on or before such effective date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01838-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to certain calculations for enhanced STAR
Purpose
This bill will require home owners who do not qualify for the enhanced STAR exemption, and who purchase property from an qualified enhanced STAR individual, to pay back the pro-rata share of the exemption they are not qualified for.
Summary of provisions
Section 1. Amends subdivision 9-b of section 425 of the real property tax law to provide that if a parcel of real property currently receiving the enhanced STAR exemption is sold to a purchaser who is not entitled to such exemption, the purchaser must pay the pro-rated portion of the exemption that is due back to the municipality.
Section 2. Effective date.
Justification
Qualified seniors in New York receive the Enhanced STAR exemption, providing them with significant real property tax savings. However, when a non-qualified individual purchases real property from a senior who is receiving Enhanced STAR, they are reaping a benefit they are not qualified for. In order to make the municipality whole, this benefit should be returned to the municipality, at a pro-rata rate, by a purchaser who does not qualify for this benefit. This is already being done with the basic STAR exemption.
Legislative history
2015-16: S1746 - Aging 2013-14: S.2196 - Finance Committee 2012:S.6245 - Aging Committee
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.