The School Tax Relief (STAR) exemption (Real Property Tax Law, §425) provides a partial exemption from school taxes for most owner-occupied, primary residences.

The exemption consists of two parts: (1) a "Basic" exemption available to virtually all New Yorkers who own their own one, two, or three family home, condominium, cooperative apartment or mobile home; and (2) an "Enhanced" exemption available to senior citizens (age 65 and older) with yearly incomes of $60,000 or less.

As originally enacted, both the Basic and Enhanced exemptions were to be phased-in over three years, the Enhanced exemption to begin with 1998-99 school taxes, the Basic to begin with 1999-2000 school taxes. The Basic STAR exemption will be phased-in as scheduled, but the Enhanced STAR exemption was accelerated, giving income-eligible seniors their full STAR tax cut in school year 1998-99 and continuing each year thereafter.

The Enhanced STAR exemption works by exempting a certain portion of the full value of the home, and eligible seniors will see their school property taxes cut by a statewide average of approximately 45%. When the Basic STAR exemption is fully phased-in, the tax cut will average approximately 27%.

To receive the STAR exemption, taxpayers must file an application with their local assessor. Property owners who are granted the Basic exemption generally will not need to reapply in subsequent years. However, property owners will need to notify their assessor if their primary residence changes. Property owners who receive the Enhanced STAR exemption must reapply each year to ensure that they still meet the income requirement.

Although New York State law includes over 200 real property tax exemptions, STAR is unique in two ways. First, it is the only exemption that is funded by the State. All other exemptions erode the tax base and shift the incidence of the tax burden (by increasing the tax rate) to those not enjoying the exemption. Second, STAR is unique in its scope. Whereas other exemption programs have targeted sometimes significant numbers of owners (e.g. some 650,000 veterans exemptions (RPTL, §§458, 458-1) and 180,000 senior citizens exemptions (RPTL, §467) were granted on 1997 assessment rolls statewide, none has come close to the overwhelming breadth of the STAR program (an estimated 3,000,000 receive STAR).

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