Understanding STAR

Understanding New York's Star Program

 

What is STAR?

Most New York State homeowners are familiar with STAR, the School TAx Relief
program launched in 1998-99. Originally intended to assist senior citizen (age 65 and
over) homeowners, STAR was quickly increased and expanded to include residential
properties of other school district taxpayers.

Qualified homeowners (who must apply to participate in STAR through their local
assessor) receive a partial property tax exemption under the program, which reduces
what they would otherwise owe on their property tax bills that year. Local school
districts are, in turn, reimbursed by the state for the uncollected property tax revenues.

Most STAR recipients save several hundred dollars on their property taxes eachyear.
Several factors contribute to the calculation of the actual amount, including the
assessed value of the home and its location (some counties are adjusted upwards
to account for higher home values and higher taxes), the level of assessment in the
community, and an annual adjustment based on the rate of inflation (for Enhanced
STAR only).

Prior year savings under STAR are now also a factor. In 2011-12, the state enacted a
2 percent cap on the increase in maximum STAR savings over the previous year.
Although STAR exemptions apply to school property taxes, school districts have no
influence over the exemptions or tax savings. STAR exemption amounts are calculated
by the Office of Real Property Tax Services (ORPTS), a division of the state Department
of Taxation and Finance.

Because assessment data and equalization rates are not usually available during the
spring school budget season, school districts frequently resist quoting future tax rates
related to their proposed spending plans. Accurate tax information becomes available
later in the summer before tax bills are sent to residents.

The school property tax bill will clearly state the STAR exemption amount and tax
savings. If taxes are held in an escrow account, homeowners should receive a receipt
that includes STAR information.

THERE ARE TWO TYPES OF STAR AVAILABLE BASED ON THE AGE AND INCOME OF
THE HOMEOWNERS:

BASIC STAR is available on a homeowner’s primary residence only, and for households with an income of less than $500,000. Homeowners need apply only one time for BASIC STAR, and it remains in effect until ownership of the home changes. However, the exemption amount is calculated each year, and the actual tax savings may change annually.

ENHANCED STAR assists homeowners age 65 and older with household incomes below a specific
limit that is adjusted annually based on the rate of inflation ($84,550 or less in 2016). The income limit is applied to all owners of the property and any owner’s spouse who resides at the property. Enhanced STAR is available on the homeowners’ primary residence only, and requires an annual application with proof of income, typically by March 1.

 

 

 

 

 

 

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More Info

For detailed information about the STAR program including eligibility, application instructions and forms, municipality exemption amounts, and maximum STAR savings, visit the New York State Department of Taxation and Finance website by clicking here.