The Real Deal New York

City lost $46M by giving property tax breaks to dead New Yorkers: Stringer

Finance Department failed to keep track of senior citizens

July 08, 2016 10:20AM

Illustration by Lexi Pilgrim

Talk about death and taxes. New York City’s finance department missed out on roughly $46 million in property tax revenue by giving property tax breaks to dead New Yorkers, according to an audit by comptroller Scott Stringer.

The department gives tax breaks to properties owned by senior citizens. Technically it is required to reevaluate each individual tax break every two years, but according to the audit it failed to do so. Instead, it continued to apply the 17,354 discounts to 3,246 properties over six years, long after the owners in question had died. Those same properties also received what’s called an “enhanced STAR exemption” following the homeowner’s death, resulting in another $10.5 million in lost revenue, according to Stringer.

In all, the audit found that the Department of Finance failed to collect $59.2 million in exemptions from deceased homeowners and corporations that were improperly awarded tax breaks.

The comptroller identified 71 properties owned by corporations that received 307 exemptions they were not eligible for, representing a loss of at least $1.4 million from 2011-2016, Stringer said. The audit also found 570 properties with four or more units that had applied for a school exemption tax to all of the units instead of the one unit that qualified, Stringer said. It led to the loss of at least $11 million over the six-year span.

“Our audit uncovered that the Department of Finance has been giving away tens of millions in tax exemptions meant for senior citizens to corporations and deceased New Yorkers,” Stringer said in a statement. “This lost revenue could have gone toward building the affordable housing we desperately need, or increasing resources for our school children. Programs like the Senior Citizen Homeowners’ Exemption help older New Yorkers to stay in their homes and remain in their communities. The City must ensure these tax breaks only go to those who deserve them.”

The department told the Associated Press that it hired additional employees to fix the problem. – Konrad Putzier

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