How to prevent a property tax break from going bust

LEVITTOWN, NY (WABC) -- There is a tax break for homeowners that should've saved one family thousands of dollars, but instead wound up costing them big bucks.

Kevin and Tracy Perkins' jobs working with developmentally challenged adults doesn't make them millionaires, but they both love what they do. They worked hard to afford their modest home in Levittown.

"Our paychecks, month to month, that's how we live," Tracy said. "You know, we try to save."

Now, the couple says they feel like they got sucker-punched after a letter came in the mail stating they owed more than $1,700 to a company called Star Exemption Advisor.

"We couldn't believe this letter saying we signed letters with a third party," Tracy said. "It was breathtaking."

It turns out the first-time homeowners did sign a contract with a for-profit third party that offered to file the form for the Star Exemption, which gives qualifying New York residents school tax relief, on their behalf.

"Instead of me just handing you paperwork, why would I say, here, I'm going to give it to this guy and have him hand it to you," Kevin said. "Why would we do that?"

Why they would do it is simple. The third party solicitors are attaching the official government tax exemption forms with their letters.

"They're doing it legally," Nassau County Consumer Affairs Commissioner Madalyn Farley said.

In 2011, the last time 7 On Your Side informed Nassau County Consumer Affairs first-time homeowners were getting mixed up, Commissioner Farley took action. Agents required Star Exemption Advisor add disclaimers in bold and underlined print.

"They did do what we asked," Farley said. "But homeowners are still not realizing that they can do this for free themselves and not have to pay a full year's tax reduction to a middleman."

After we contacted the owner of Tax Exempt Advisor, he agreed to half his fee for the Perkins family.

Farley also said Nassau County will include a consumer alert, warning homeowners they can file for the exemption for free, whenever materials are sent out to them.