Did You Just Double-Dip That Chip? Cuomo Cracks Down on School Tax Relief Abuse

Double-dippers beware.

Double-dippers beware. (Health Results Group, LLC)

Governor Andrew Cuomo announced today that so-called “double-dippers”—New York residents enjoying both rent-regulated apartments and School Tax Relief (STAR) rebates—will soon be made to pay. More taxes, that is. STAR, which has been around since 1997, and which benefits roughly three million people statewide, grants tax relief—an average of $700 a year—on primary residences that fall within school districts. Homeowners earning less than $500,000 annually and senior homeowners taking in less than $81,900 are eligible for STAR benefits. But a recent analysis of the STAR registration system found that at least 156 recipients also occupy rent-regulated apartments, which makes rather suspect their collecting tax breaks on properties legally required to be primary residences.  

“These programs are meant to deliver much-needed rent and property tax relief to New York residents, and any corruption of the system hurts the hard-working tenants and homeowners who follow the rules,” Governor Cuomo said in a release. Double-dippers will soon receive joint letters from New York State Homes & Community Renewal and the State Tax Department giving them 60 days to correct what the state, at least for the moment, appears willing to regard as a record-keeping error. After that, recipients risk having their landlords notified of their two-timing ways.

The move follows on the heels of last year’s requirement that residents register for the STAR tax break on an annual basis; the first time in the 15-year-old tax break’s history that they had been required to do so. Apparently, the state is now using that new information to root out tax scofflaws.

If the latest tack seems an indirect way to confront apparently fraudulent activity, it also has the effect of threatening offenders with the loss of rent-regulated apartments without entering into messy legal proceedings. (Letter recipients may opt, of course, to remain on the STAR rolls, giving up instead their rent-regulated privileges; given the average savings involved, however, that would seem a rather foolhardy play.)

“Today we are sending a strong message about primary residency that is explicitly stated in the law, as well as in every lease and property tax bill,” said Commissioner of New York State Department of Taxation & Finance Thomas H. Mattox. ” However, it is also simple common sense: if you lease a rent-regulated apartment, you cannot also have another home as your primary residence.”

We tend to agree.