Q: I own in a large co-op complex, and personally qualify for a STAR tax rebate. [Ed note: It's a tax rebate available to homeowners 65 or older, as well as those within certain income brackets.] My co-op lumps all the rebates for which people in the building qualify as a single credit to the cooperative, and re-distributes the credit to people individually based on a formula to determine their share of the rebate. However, the co-op then grabs most of that rebate back via assessments, meaning that every owner gets to benefit from a rebate only certain people qualified for, and on the flip side, those who did qualify are deprived of their benefit. Is this legal?
There are very specific rules for how co-ops should credit shareholders who receive STAR tax rebates, and your building doesn't seem to be following them, say our experts.
"The law mandates the cooperative and/or its managing agent to administer the tax rebate and to credit the STAR tax exemption only to those tenant shareholders who qualify for the exemption," says real estate attorney Steve Wagner of Wagner Berkow.
Once your co-op gets information from the taxing authority on which apartments and owners qualify for the rebate, says Wagner, the managing agent is supposed to calculate the amount of savings for each qualifying shareholder, and either credit those savings against your usual monthly taxes, or give you the money in one lump sum. (If they choose the former option and credit your STAR savings to your monthly taxes, they can choose to do this over the course of 12 months, 6 months, or a single month, adjusting the amount of monthly savings accordingly.)
The New York State Department of Taxation and Finance has a detailed guide on how co-op buildings should handle residents' STAR rebates here—if your board or managing agent has been doing some "fuzzy math" on getting you the full amount of your rebate, you'd do well to remind them of these rules.
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