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.
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. 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.