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What Is the Home Improvement Exemption? Find Out Now…

01/21/2022
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Homeowners in Nassau County are certainly no strangers to any number of acronyms associated with their property taxes. While STAR or SCAR might sound somewhat familiar, the four letters H-I-E-X may not yet be in your abbreviation vocabulary. So we turned to the experts at Maidenbaum Tax to define, dissect and demystify the new kid on the block: the HIEX.

What is the HIEX, and what is it intended to do?
A new exemption has been instituted for some homeowners for the 2021/22 tax year: the Home Improvement Exemption (HIEX).  The exemption applies to any homeowner whose property increases in value up to $750,000 (previously capped at $80,000) as a direct result of improvements/construction.

Why was the HIEX instituted?
In previous years, homeowners who completed construction or major renovations were often slammed with significant property tax increases in a relatively short period of time. The HIEX was likely instituted to alleviate some of that “sticker shock”. Now, for those who qualify for the HIEX, the increases will be phased in over time. (See next question and answer.)

When will the HIEX be phased in?
The exemption will be phased in over an 8-year period (with the 9th year having no exemption), and does not require the homeowner to file an application. But all improvements need to be completed by January 2023.

Does the HIEX apply to any home-improvement or construction?
Take note that the HIEX only applies to construction/improvements made to a single structure (adding another structure to the property or yard improvements will not qualify the homeowner for the HIEX).

How will Nassau County apply the HIEX?
The HIEX will be automatically applied to the property based on permits filed with the County and County verification of the completion of the work. All homeowners filing permits are advised to make the Department of Assessment aware of these permits to make sure that the exemption will be implemented.

Below is a chart showing how the HIEX phase-in will be implemented, assuming an increase in market value of $600,000 due to new construction/improvements.

Hiex Example Chart

Will the HIEX actually help homeowners?
The HIEX is a beneficial exemption that Nassau County homeowners can use to limit the tax bite on their home improvement projects. This will encourage homeowners to make necessary improvements without fear of property tax “sticker shock.”

Any meaningful step to lower property impacts on Nassau County homeowners is welcome news in our book. High and continuously rising property taxes make home ownership unaffordable for many, and discourage new residential construction projects that might alleviate Nassau County’s current housing shortage.

How can homeowners best take advantage of the HIEX?
If you want to take advantage of the HIEX exemption, you may want to consider advancing your construction/improvement projects so that they conclude in time. The HIEX expires with the 2024/25 roll, which comes out January 2, 2023.  As such, all work must be completed and filed for by that date.

Our advice to you is to strive to have all new construction/renovations done by Summer 2022, so all the proper paperwork can be filed timely.  This task may be difficult, given current disruptions in the global supply chain that have interfered with the delivery of necessary building materials. So, it’s best to start planning now to secure financing and contractors/suppliers so that the job is completed in a timely manner.

Again – this is important – make every effort to get the Department of Assessment to confirm that they have everything they need so that the new valuations will be reflected no later than the 2024/25 assessment roll. You can reach their office by calling 516-571-1500 or via the website by clicking here.

Learn more about property tax grievances and other property tax issues at maidenbaumtax.com or by calling 516-715-1247.