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 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. The Basic STAR and Enhanced STAR exemptions reduce what homeowners would otherwise owe on their property tax bills.** Most STAR recipients save several hundred dollars on their property taxes each year.
Several factors contribute to the calculation of the actual exemption amount, including the level of assessment in the community and, for Enhanced STAR only, an annual adjustment** based on the rate of inflation. Prior-year savings under STAR are also a factor, as there is now a 2 percent cap on the increase in maximum STAR savings over the previous year.** STAR exemption amounts are calculated by the Office of Real Property Tax Services, a division of the NYS Department of Taxation and Finance. A homeowner’s property tax bill clearly states the exemption amount and tax savings. If taxes are held in an escrow account, homeowners should receive a receipt that includes STAR information.
Two types of STAR
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 once for Basic STAR, and it remains in effect until ownership of the home changes. The exemption amount is calculated each year, and 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. 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.
Visit www.tax.ny.gov/pit/property/star/special_eligibility.htm for guidance on special eligibility rules for seniors with limited incomes, residents of cooperative apartments and manufactured home parks, surviving spouses, nursing home residents, trusts and life estates.*
Because of changes New York state made to the Enhanced STAR tax exemption in 2018, all residents age 65+ enrolled in Enhanced STAR now need to also be enrolled in the state’s Income Verification Program (IVP) to continue receiving their Enhanced STAR benefit.
Prior to 2019, residents who qualified for a senior citizen exemption were automatically enrolled in the Enhanced STAR exemption program. Districts should communicate with taxpayers about this change, and the upcoming deadline, to remind residents that if they are 65+, they may need to enroll in IVP to continue receiving their tax benefit.
If a resident is already enrolled in IVP, no action is necessary to continue receiving the Enhanced STAR exemption.
Homeowners only have to enroll in IVP once. After that, New York state verifies income eligibility automatically. As long as homeowners remain income-eligible, they will continue to receive the benefit every year.
How does STAR affect school districts?
Local school districts are reimbursed by the state for property tax revenues that go
uncollected as a result of STAR exemptions. Based on the governor’s executive budget proposal in January 2016, STAR would shift an estimated $3.1 billion from the local tax burden to the state in 2016-17. Although STAR exemptions apply to school property taxes, school districts have no influence over the exemptions or tax savings. 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.
In 2016, as part of a new property tax rebate created by lawmakers last year, all 2.5 million homeowners who qualify for a STAR exemption also will receive a $185 check from the state, except those living in the New York City suburbs, who will receive $130. Between 2017 and 2019, the rebate amounts will be tied to a percentage of homeowners’ STAR tax savings and be available only to households with incomes under $275,000.
Go online for more detailed information about the STAR program, including eligibility
guidelines, application instructions and forms, municipality exemption amounts and
maximum STAR savings:
- Find a town assessor: http://orpts.tax.ny.gov/MuniPro/
- Additional property tax exemptions for seniors: www.tax.ny.gov/pit/property/exemption/seniorexempt.htm