Property Tax Exemption for Homeowners

The New York State School Tax Relief (STAR) Program has the following features:

• Homeowners are allowed to exempt part of the value of their primary residence from local school taxes. For most homeowners the exemption is $30,000. A homeowner whose house was worth $150,000, for example, would pay school tax on $120,000 rather than on the whole $150,000. In a town with a school tax rate of 2.5%, the homeowner's school tax payment would drop from $3,750 to $3,000.
• Senior citizens, or households with combined incomes below about $65,000 are allowed to exempt $50,000 rather than $30,000.
• The state government compensates school districts for the loss in tax revenue. In the example above, the state would transfer $750 of general revenue (largely from state income taxes) to the school district.

How does the STAR program affect local property markets? In qualitative terms, what happens to the allocation of land between owner-occupied housing (OOH) and other land uses? Who gains and who loses from the program? How does the program affect landlords?

See the links below if you're interested in learning more about the STAR program.

Additional Information