STAR Exemptions in residential New York Real Estate transactions.

In your search for a home in New York State (Rockland, Dutchess, Putnam, Ulster, Westchester County), you may have come across listings that say that the annual taxes include STAR – what does that mean for you as a potential homebuyer?

The STAR exemption, which is the New York State School Tax Relief Program, provides partial tax exemptions for homeowners that live in their home as a primary residence and meet certain income requirements. So, if you see a real estate or multiple listing that says the taxes “include STAR,” it likely means that the taxes listed have been reduced to reflect this exemption (i.e.reduced). However, it is important to realize that the exemption is specific to the individual homeowner, and just because the previous owner got the STAR exemption, it does not mean that you will too, unless you meet the guidelines and file your application by the deadline.

There are two types of exemptions under STAR: (1) “Basic Star” which applies to resident homeowners whose income combined with their spouse is $500,000 or less and exempts the first $30,000 of the full assessed value of the home from school taxes; and (2) “Enhanced Star” which applies to resident homeowners age 65 and older with an income of $79,050 or less and exempts the first $62,200 of the full assessed value of the home from school taxes. There are limits, however, on the amount of savings a homeowner can get from the STAR exemption.

If you qualify, you have to submit an application for the STAR exemption to your local assessor before the exemption will be applied. There are very specific deadlines for the STAR application each year, so make sure to contact your local assessor’s office to confirm the deadline. If you miss the deadline by even a day, you will most likely have to pay the full amount of school taxes for the year even though you would have otherwise qualified for the STAR exemption. Also, always check the assessor’s roll when it is published to make sure the STAR exemption is listed for your property.

Bottom line: The STAR exemption can save you a significant amount of money on your annual property taxes. As soon as you buy your home, make sure to contact your local assessor to confirm the deadline to file your application. We at Klose & Associates generally try to advise clients of these issues during the closing and use title companies that supply the forms for such.