Falling STAR: Why exemptions may shrink in 2026 - by Jeremy May

The School Tax Relief program, better known as STAR, has been part of New York’s property tax landscape for decades. Enacted by governor George Pataki in 1997, it was originally structured to reduce school tax bills directly through a partial exemption of assessed value. The state would then reimburse school districts for the revenue lost due to the exemption.

In 2016, the state reorganized the STAR program. For new homeowners, the legacy exemption was replaced with an annual rebate check issued by the Department of Taxation and Finance. In many Long Island municipalities, the rebate amount has been decreasing annually.

The reasons for the declining rebates can be found in the governing statute, Real Property Tax Law § 425(a). Since 2009, the base figure for a STAR rebate has been $30,000 of a home’s market value. That figure is adjusted by comparing median and mean residential sale prices in each county. Where the median lags well behind the mean, the multiplier can significantly increase the exemption; where the two are close, the multiplier falls back toward one, reducing the benefit.

The equalization ratio adds another layer to the calculation. In jurisdictions that assess at full market value, the base figure flows directly into the calculation. In assessing jurisdictions such as Nassau, where residential property has been assessed at 0.1% of market value since 2019, the $30,000 base figure translates into just $30 of assessed value.

To prevent abrupt swings, the law imposes a floor: the STAR amount cannot fall by more than 11% in a single year. Nonetheless, reductions are possible. If the relationship between mean and median sale prices shifts, the sales-price multiplier shrinks. If an equalization rate declines, the benefit contracts further. Using Nassau County as an example, a move from a 0.1% ratio to a 0.09% ratio drops the STAR value from $30 to $27 in assessed value.

Eight of the ten Suffolk County towns also assess at a fraction of market value. The post-pandemic housing boom has caused local equalization ratios to plummet, contributing to a declining STAR rebate. In the Longwood School District, for example, the STAR rebate has dropped from $1,200 in 2020 to $962 in 2024.

In 2025 and 2026, that formula may yield smaller benefits, not because of changes in eligibility, but because of market conditions and assessment practices. For practitioners in the Long Island real estate industry, the important point is that STAR is no longer a fixed or reliable offset. Its value is recalculated annually, and the trend is toward decline.

Jeremy May, Esq. is an associate attorney with Schroder & Strom, LLP, Garden City, N.Y.