Understanding the School Tax Relief (STAR) Program in NYC

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Homeowner cutting out a coupon to apply to the NYC STAR program

It can be hard to keep track of all the different ways NYC homeowners can save on their property taxes. Sometimes it’s complicated enough for you to say forget it! But don’t miss out on the School Tax Relief Program or STAR Program. If you meet the broad requirements, filling out a form can save you a few hundred bucks a year!

Table of Contents:

What is the STAR program in New York?
Who qualifies for the STAR program?
How do I apply for the STAR program?
What is enhanced STAR?
How much will I save with the STAR program?
How do I check my STAR status?

What is the STAR program in New York?

The STAR program is a New York State tax rebate program designed to lower the school tax bill for homeowners with a primary residence in the state. In order to participate, an individual homeowner must apply. This is unlike 421a tax abatements where the savings are at the building level and automatically included in your property tax bill.

Savings from the STAR program are made up by New York State so the total amount that goes to each school district is not affected.

The STAR program can be confusing because there is a STAR exemption and a STAR credit. The exemption is taken directly off your property tax bill while with the credit you are reimbursed with a check after paying the entire bill.

Following changes in July 2019, the STAR exemption is closed to new applicants and previous enrollees making over $250,000 will now receive a credit. Previous enrollees making $250,000 or less can continue to receive the exemption but it is not advised because the amount is fixed while the credit can increase up to 2% per year.

Type Definition Enrollment Recent Changes
STAR Exemption* Savings deducted directly on tax bill Closed Previous enrollees making over $250,000 now receive STAR credit
STAR Credit Savings reimbursed after payment Owners earning less than $500,000 None
*If you are currently registered under the STAR Exemption and make less than $250,000, you may receive a larger benefit if you switch to the STAR credit.

Who qualifies for the STAR program?

To qualify for the NYS STAR program, you simply need to own your primary residence and make less than $500,000. It’s that simple. The state will look at the income of any resident owner plus their spouse’s income.

Among a married couple, only one property can claim the benefit. If the couple owns two properties and both are claimed as a primary residence, they need to pick one for STAR.

All types of homes are eligible - condos, co-ops, houses, manufactured homes, farms, mixed-use properties, etc.

You can find all the details of STAR eligibility here.

How do I apply for the STAR program?

You can apply for the STAR program using this link. There you will find the documents required to sign up. The list basically consists of property ownership and income verification and is submitted to your local assessor's office.

Once you sign up, you’re set. You do not need to reapply each year. The state will automatically renew your application and you will only have to take action if there is a change in ownership of your home.

What is enhanced STAR?

Everything we have discussed is for Basic STAR. There is also another program called the Enhanced STAR which has additional requirements.

Specifically, all owners of the property must be at least 65 years old. The income requirement is also much lower at $88,050. Given Enhanced STAR is primarily for retirees, recipients are able to deduct distributions from IRAs and annuities from their federal adjusted gross income.

How much will I save with the STAR program?

Basic STAR will save you about $293 per year and Enhanced STAR will save you about $650 per year.

The mechanics are a little tricky but the savings come from New York State ignoring $30,000 of property value for Basic STAR recipients and $68,700 for Enhanced STAR recipients.

How do I check my STAR status?

If successful, you will be provided with a confirmation number at the end of your enrollment. You can also call the Department of Taxation to confirm at 518-457-2036. They will be able to tell you when your registration was processed and update you on any credits that have been paid out.

This post should not be used as tax advice. Please contact a qualified accountant if you have any questions about your particular situation.
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