Renters in New York City may be in for some overdue tax relief soon, although Governor Andrew Cuomo’s proposed tax credit plan remains a bit sketchy on the details.
New York State’s maximum benefits remain among the stingiest and its eligibility criteria among the most stringent of those 18 states that offer any such relief at all. Neither the benefits nor the eligibility guidelines have been updated since the 1980s.
Currently, the State offers a modest tax break to some renters; i.e., a maximum of $75 per year (or up to $375 annually for renters 65+). And this is only for those with annual incomes up to $18K who pay a maximum rent of $450 per month. Some states pay up to $2,000 annually per renter household.
Governor Cuomo’s plan proposes to offer a new tax break for tenants earning less than $100K a year. This would affect nearly 80% of the 3.3 million renting households in the State and would save more than $400 million a year.
In New York City, which has the lion’s share of the State’s renters, median rent has risen to $1,196 per month, resulting in an increase of homelessness. According to the Furman Center for Real Estate and Urban Policy at NYU, 31% of renters in Gotham pay 50% or more of their income in rent and utilities.
While renters don’t pay the property taxes that home owners do, they don’t get the tax breaks available through the STAR exemption program, either and their landlords’ property taxes are typically subsidized by their rent.
Both the Governor’s Office and advocacy groups representing low-income New Yorkers agree that tax relief is needed. How much and for whom remains the question everyone hopes to have answered soon, now that the economic climate shows signs of improvement.