New York State Homestead Exemption: STAR Credit Rules, Caps & Asset Protection
In New York State, the property tax “homestead exemption” is primarily known as the School Tax Relief (STAR) Program. The Basic STAR program exempts the first ~$30,000 of your home’s full value from school taxes, while the Enhanced STAR program for seniors age 65+ exempts over $84,000.
Separately, New York provides a powerful Bankruptcy Homestead Exemption (CPLR § 5206), which protects up to $170,825 of your home’s equity from judgment creditors depending on your specific county.
The STAR Exemption vs. The STAR Credit (Check)
New York changed the law to phase out upfront property tax exemptions for new buyers. Depending on when you bought your home, you fall into one of two completely different systems.
The STAR Exemption (Grandfathered)
If you bought your home before August 1, 2015, and have been receiving the STAR exemption on your school tax bill, you can keep it. The exemption directly lowers the assessed value on your tax bill before you pay it.
Income Limit for Exemption: You must earn $250,000 or less. If your income is between $250k and $500k, you must switch to the Credit.
The STAR Credit (New Buyers)
If you bought your home after August 1, 2015, you must register for the STAR Credit. You will pay your school taxes in full to your local district, and the NYS Department of Taxation and Finance will mail you a check (or direct deposit) for your STAR savings.
Income Limit for Credit: You must earn $500,000 or less. The state legally ensures the Credit amount can grow up to 2% per year, while the Exemption amount is permanently frozen.
Exact Micro-Guide: Registering for the STAR Credit
If you are a new homeowner, you must register for the STAR Credit directly with the New York State Department of Taxation and Finance (NYS DTF). It takes about 10 minutes.
Step 1: Gather Your Information
Names and Social Security Numbers
You need the names and SSNs for all owners of the property and their spouses. You will also need the primary owner’s primary phone number and email.
Deed and Purchase Info
Have your closing documents ready. You must provide the exact date you purchased the property and the name of the sellers.
Recent Tax Return
You will need your prior-year federal or state income tax return to input your Adjusted Gross Income (AGI) to prove you fall under the $500k limit.
Step 2: Use the State Portal
Access the NYS DTF Portal
Navigate directly to the official state site at tax.ny.gov/star. Click on “Register for the STAR credit.”
Complete the Questionnaire
The system will ask if the property is your primary residence. (You cannot claim STAR on a vacation home or secondary property). Input your SSNs, income, and deed info.
Submit and Wait for the Check
Once submitted, you do not need to register again in future years. The state will automatically verify your income each year and mail you a check prior to your school tax due date.
NYS STAR Credit Savings Calculator
Curious how big your check will be? The STAR savings is calculated by multiplying your local school district’s tax rate by the STAR exemption value for your area.
Estimated STAR Credit (Check Amount)
*Note: The exact exemption value varies slightly by county due to state equalization rates (e.g., Downstate counties may have slightly adjusted base values). The average NY school tax rate is between $20 and $30 per $1,000 of assessed value.
Enhanced STAR, Senior Citizens & Veterans Exemptions
In addition to Basic STAR, New York offers deeply subsidized property tax relief for older adults, low-income seniors, and military veterans.
| Exemption Program | Qualifications & Income Limits | Benefit / Tax Savings |
|---|---|---|
| Enhanced STAR | Age 65+ by Dec 31. Income must be under $107,300 (for 2025/2026). | Exempts roughly $84,000+ from school taxes. (Check size is often $1,000 – $2,500+). |
| Senior Citizens Exemption | Age 65+. Local option; strict low-income limits set by the municipality (usually under $50,000 – $58,400). | Reduces county, city, town, or village taxes by up to 50%. (Handled by local assessor). |
| Alternative Veterans Exemption | Served during a period of war. Must file Form RP-458-a with local assessor and provide DD-214. | 15% reduction for wartime, +10% for combat zone, plus an amount equal to half of your VA disability rating. |
| Cold War Veterans Exemption | Served during the Cold War (Sep 2, 1945 – Dec 26, 1991). Form RP-458-b. | 10% or 15% reduction in assessed value (local option), plus disability match. |
The “Other” NY Homestead Exemption (CPLR § 5206)
When lawyers and debt advisors discuss the “New York Homestead Exemption,” they are not talking about property taxes. They are referring to Civil Practice Law and Rules (CPLR) Section 5206, which protects your home’s equity from judgment creditors and bankruptcy liquidations.
Common NYS STAR Rejections & Solutions
I Didn’t Get My STAR Check
If your neighbors received their checks but you did not, you can use the STAR Check Delivery Schedule tool on the NYS DTF website to track the mailing status for your specific school district. If the state couldn’t verify your income, they may have sent a letter requesting additional info.
Switching from Basic to Enhanced STAR
If you have the STAR Exemption (grandfathered): You must apply for Enhanced STAR with your local assessor using Form RP-425-E and enroll in the Income Verification Program (Form RP-425-IVP).
If you have the STAR Credit: You don’t have to do anything! The State will automatically upgrade your check to the Enhanced amount the year you turn 65, provided your income qualifies.
Property Is Held in a Trust
If your home is in a revocable trust, you can still receive the STAR credit as long as you (the grantor/beneficiary) actually live in the home as your primary residence. You will report the trust on the online application.
Income Exceeds $500,000
If your Adjusted Gross Income (minus IRA distributions) exceeds $500,000 for the tax year used for verification, you will not receive a STAR check for that year. If your income drops below $500k in the future, the state will automatically resume sending your checks.
New York STAR & Homestead FAQs
Does New York have a traditional property tax homestead exemption?
New York’s version of a homestead exemption for property taxes is the STAR (School Tax Relief) Program, which exempts a portion of your home’s value from school taxes.
Why did I receive a STAR check instead of a tax bill reduction?
In 2015, NYS changed the law. Anyone who purchased a home after August 1, 2015, cannot receive the upfront exemption on their tax bill. Instead, you must register for the STAR Credit, and the state mails you a check.
What is the income limit for the STAR program?
For the Basic STAR Credit (check), the income limit is $500,000. For the grandfathered Basic STAR Exemption, the limit is $250,000. For the Enhanced STAR program (age 65+), the income limit is $107,300 (for the 2025/2026 cycle).
How much equity does the NY bankruptcy homestead exemption protect?
Depending on the county, CPLR § 5206 protects $85,400, $142,350, or $170,825 of your home’s equity from judgment creditors. This amount is doubled for married couples filing jointly.
Where do I apply for the Veterans Exemption in NY?
Unlike the STAR credit, which is handled by the state, you must file Form RP-458-a (Alternative Veterans Exemption) directly with your local town or city assessor.