Scarinci Hollenbeck, LLC
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201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: August 11, 2015
The Firm
201-896-4100 info@sh-law.comGovernor Andrew Cuomo recently announced that the “Big Ugly” $1.3 billion rebate check program will be installed to offset New York state property taxes. In accordance with the legislation, 2.5 million homeowners that make under $500,000 will receive a property tax rebate check for $185 this year.
According to the final agreement, property taxpayers that qualify for the Big Ugly rebate check program will receive the standard $185 check the first year, then have this amount scaled for the remaining three years depending on their location and income. However, the deal also involves a four-year extension of the property tax cap program with two new exclusion clauses including payments to the Board of Cooperative Educational Services and payments-in-lieu of taxes.
In order to qualify for the rebate program, the school district of the taxpayer must remain under the property tax cap. However, the law was structured so that thousands of homeowners in the upstate region will receive the $185 rebate check in the first year, but by the second year of the program, qualifications for the rebate are based on a homeowners’ School Tax Relief property tax savings. This means that taxpayers making under $75,000 will receive a rebate check for 28 percent of the value of the savings, while those making under $150,000 will receive a check for 20.5 percent.
Those who qualify for the program in the fourth year will see their rebate benefits increase. For example, those individuals who make less than $75,000 will receive 85 percent of the STAR savings, and 60 percent for those making under $150,000. Ultimately by the end of the final year, homeowners in these income brackets will receive $530 in tax rebates on average throughout the duration of the program.
The qualifications for homeowners change as each region has their own specific income threshold. For instance, in upstate New York, the income threshold to qualify for the rebate check program is $200,000, whereas this threshold is $275,000 on Long Island. The rebate program was not made available for property owners in New York City, although this region is expected to contribute to the tax pool for the program. There are also problems associated with check-mailing plans due to the fact that New York state spent $1.6 million to mail out four million refund checks.
All told, the Big Ugly bill will total $3.1 billion in rebates over four years, with $1.3 billion in the final year.
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