Homeowners and renters of relatively limited means could be in for some property tax relief, thanks to a $1.66 billion tax credit program announced by Governor Andrew Cuomo this week as part of his proposed budget package.
In Suffolk County, the program is expected to save 125,167 homeowners in Suffolk County an average of $1,148 in the final year of a four-year phase-in. Renters who qualify would save as much as $750.
Households with incomes below $250,000 would be eligible for a tax credit based on the amount by which their property taxes exceed 6 percent of their income. The lower their income and the greater the degree to which their taxes exceed the percentage threshold, the larger the credit would be—up to a cap of $2,000.
A family with a household income of slightly less than $75,000, for instance, who pay $6,000 in property taxes—$1,500 more than the $4,500 that would represent 6 percent of their income—could receive a credit of almost $750, 50 percent of the amount exceeding the percentage threshold. Those earning from $75,000 to $150,000 would be eligible for 40 to 50 percent of the amount above the 6-percent threshold, and those earning $150,000 to $250,000 would be eligible for 15 to 40 percent of that amount in tax credits.
State Assemblyman Fred W. Thiele Jr., who supports the governor’s proposal, said it was his understanding that the credit would come in the form of an income tax reduction, much like earned income credit.
Renters with incomes up to $150,000 would be credited when the amount they pay in rent that can be attributed to property taxes, which is expected to be 13.75 percent, exceeds 6 percent of their income. The credit would be capped at $750.
Because those living in school districts with higher property taxes and lower incomes would benefit most from the program, Mr. Thiele said western Suffolk taxpayers would most likely see higher benefits than those in eastern Suffolk—although taxpayers in districts like Hampton Bays, Eastport and Riverhead could see relatively high reductions.
Suffolk County would see the highest average level of individual relief statewide, however, according to a press release from the governor’s office.
“Over the last few decades, property taxes in New York have risen to historic levels,” the release says. “The question for families across the Empire State was no longer whether they could afford to buy a home—once the symbol of attaining the American dream—but whether they could afford to pay the property taxes on that home.”
There is one catch, and it echoes the governor’s push to squeeze school tax hikes through both the 2-percent tax levy cap and the property tax freeze enacted last year, which rewarded taxpayers in cap-compliant school districts with checks of, on average $656, according to the governor’s office. To be eligible for the proposed new tax credit program, homeowners and renters must live in school districts that do not pierce the school tax levy cap.
If approved, Mr. Thiele said he thought the tax credit program could go into effect for the next school year, 2015-16.
on Jan 19, 2015