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What is the STAR Tax Credit & Do You Qualify?

What is the STAR tax credit?

Many NYC homeowners qualify for some form of tax credit or abatement that reduces their annual property tax burden. Most abatements and exemptions are tied to specific buildings, such as 421A and J-51 abatements. However, The New York State School Tax Relief Program (more commonly known as the STAR Program), is one of the few property tax rebate programs that is not tied to a specific building, and is available to almost all NYC homeowners.

What is the STAR Program?

The STAR program is a school tax rebate program aimed at reducing school district property taxes on the primary residences. The program was enacted on August 7, 1997, by then-Governor George Pataki.

The STAR Program takes two forms: Basic STAR and Enhanced STAR. The Basic STAR is open to the primary residence of any New York State resident and exempts $30,000 from the true value of a home or property. The Enhanced STAR, for eligible senior citizens at or above age 65, exempts an annually variable amount from the true value of their primary residence. While the program is aimed to lower the tax burden on school district residents, it does not affect the overall revenue of a given school district; the difference is made up by the state.

Are you eligible?

If you own your home, it’s your primary residence, and your income is $500,000 or less, you’re eligible for the Basic STAR credit. If you’re a senior citizen with a qualifying income (currently equal to or less than $86,000/year) you may be eligible for the Enhanced STAR credit. For more information on elligibility, see the STAR eligibility chart below

STAR Eligibility Chart

How to Apply

If you are a new homeowner, you will have to apply in order to receive your STAR tax credit. Beginning with the 2016/2017 tax year New York State has changed the STAR application process. You are considered a new applicant if you purchased your home after March 15, 2015 or you did not apply for the STAR exemption by March 15, 2015. New applicants who qualify will receive a STAR credit in the form of a check, instead of receiving a property tax exemption.

When you register for the STAR credit, the Tax Department will automatically review your application to determine whether you’re eligible for the Basic or Enhanced STAR credit. As long as you’re eligible for one of the two, you’ll receive a check for the amount of your benefit. Once you’ve registered, you’ll continue to receive the credit in future years – you don’t need to re-apply.

Note that many NYC coops will assess out the amount of the STAR credit automatically. This means that if you don't apply, you don't not-get-a-check, but rather you owe your building the amount of your STAR benefit (this is how we realized we had forgotten to apply).

For more details on the program, and to register for the first time, visit the NY State Dept of Taxation and Finance here.

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