And the homestead program has for years been plagued by owners — including some politicians — "double-dipping" by improperly collecting credits on more than one home. A Sun analysis found more than 450 property owners receiving credits on two, three or four homes.
Some property owners are collecting only one credit but still aren't eligible for it. That's the case on Clement Street — Burdick's other next-door neighbor is a tenant. Property owner Christina Roby confirmed by phone that she and her husband moved out around 2008, after more than 25 years, and are renting out the house.
She said she didn't realize they were no longer entitled to the credit, which this year knocks $4,170 off their original $6,400 bill. And she emphasized that she and her husband don't collect any credit on their true residence, in the city's Ten Hills neighborhood.
"We don't understand," she said. "We do not know all the detailed regulations."
Actions and inactions
State and city officials say they are working to fix problems with the homestead credit, including those identified by The Sun.
The city's Finance Department began auditing tax credits over the summer to search for recipients getting undeserved breaks, particularly landlords. While the state determines property values and applies credits, the city collects the tax dollars.
The state assessments agency, meanwhile, has been processing tens of thousands of applications for the homestead credit over the past few years, cross-checking addresses on tax returns and drivers' licenses to cut down on people collecting the credit on homes they don't live in. Owners will automatically lose the break if they don't submit their Social Security numbers to the state agency by the end of 2012 to make that check possible.
Both efforts are aimed at weeding out people who shouldn't be getting the homestead credit at all, not finding those whose break is larger than they deserve.
"It's always been a question of available staff and resources," said Robert E. Young, director of the state Department of Assessments and Taxation, who noted that the average assessor today has nearly three times as many properties to reassess as in 1977. "What you often have to do in government is pick which audits or which checks will be the most productive."
So far the state's review has stripped thousands of unwarranted credits statewide, said Young.
"We have a great deal of confidence because of the way the system is designed, the checks we've instituted, [that] the homestead credits we've granted are properly being received," Young said.
Still, The Sun's investigation found red flags contained in the government's own files that have long gone unaddressed, costing the city money year after year.
Unassessed renovations are an example. The five renovated homes The Sun submitted to state officials — homes with taxes incorrectly pegged to their pre-rehab values — all had construction permits on file with the city describing substantial improvements the owners planned to make. Yet the city and state never connected the dots.
A house on Wyeth Street in Pigtown, for instance, sold for just over $10,000 five years ago and changed hands the very next spring for $293,000. In between, a rehabber got permits from the city to give the house an overhaul, from the drywall to the bathrooms and kitchen.
But the state didn't take that change into account, so 92 percent of the owners' bill this year — all but about $500 of the nearly $6,300 tab — was forgiven by the homestead credit.
Permits are supposed to trigger a review by the state. Owen C. Charles, deputy director of the assessments agency, said he couldn't tell whether the city had given his staff permit information on the five homes, but he says the local government's system for forwarding permits is usually reliable.
The city, for its part, could sort through its permit files to see if properties overhauled in recent years are getting unusually large credits. But finance officials argue that only the state has the records to show whether those credits are right or wrong.