NYC property tax calculation: how your bill is actually computed

Last updated 2026-07-09

Why is NYC property tax so confusing compared to other cities?

Most cities apply one tax rate to one value. New York City applies four different rates to four different property classes, each class valued under its own methodology, with caps and transition rules that mean your tax bill may have no obvious relationship to what your home would sell for.

The system traces to the 1981 property tax reform legislation. Before that, all property was assessed under a single, chaotic regime. The reform created four tax classes and handed each its own assessment fraction (called the Level of Assessment, or LOA). The legislature meant this to create fairness across property types. In practice it created a system that strongly favors owners of single-family homes over renters and apartment buyers, a fact the NYC Tax Commission and academic researchers have documented repeatedly. ^[1]

Know the structure and you can find the wrong number. Once you see exactly how your assessed value gets built, the errors jump out.

For a broader look at how assessment works across jurisdictions, see our guide on property assessment value.

What are the four NYC property tax classes?

New York City Real Property Tax Law divides all property into four classes. Your class determines which assessment methodology applies and which tax rate you pay. ^[2]

Class	What it covers	FY 2025 tax rate
Class 1	1-3 family homes, condos assessed like 1-3 family	20.085%
Class 2	Co-ops, condos (>3 units), rental apartments	12.267%
Class 3	Utility real property	12.755%
Class 4	All other commercial, industrial, mixed-use	10.646%

The rates above are for fiscal year July 1, 2024 through June 30, 2025, as published by the NYC Department of Finance. ^[3] They change every year when the city sets its budget.

Class 1 has the highest statutory rate but the most protective assessment caps. Class 4 commercial properties carry the lowest rate but are assessed at full market value. Rate and assessed value pull in opposite directions, which is what makes comparing taxes across classes so misleading when you use the rate alone.

How does NYC calculate assessed value from market value?

The formula sounds simple. Assessed Value equals Market Value multiplied by the Level of Assessment (LOA) for your class. The LOA for Class 1 is 6 percent, and for Classes 2, 3, and 4 it is 45 percent. ^[2]

So a Class 1 home the city values at $900,000 would have a tentative assessed value of $54,000. Multiply that by the FY 2025 rate of 20.085 percent and you get a tax of roughly $10,846 before exemptions.

A Class 4 office building assessed at a market value of $2,000,000 would have an assessed value of $900,000 and a tax of about $95,814 at the Class 4 rate.

But this is only the start, because Class 1 assessed values are further constrained by two statutory caps from New York State Real Property Tax Law Section 1805. ^[4] First, the assessed value cannot increase by more than 6 percent in any single year. Second, it cannot increase by more than 20 percent over any rolling five-year period. These caps mean a rapidly appreciating home can carry an assessed value far below its actual LOA fraction, which is good for the owner but makes the number opaque.

Class 2 and Class 4 have a different cap: assessed value cannot increase by more than 8 percent per year or 30 percent over five years (for Class 2 properties with fewer than 11 units). ^[4]

The NYC Department of Finance publishes each property's Market Value, Assessed Value, and Transitional Assessed Value on the Notice of Property Value (NOPV) mailed every January. The Transitional Assessed Value is the number the cap produces when the uncapped assessed value would otherwise jump suddenly. Your bill uses whichever is lower: the fully assessed value or the transitional value.

What is the actual formula for your NYC property tax bill?

Here is the full step-by-step calculation NYC uses:

1. The Department of Finance estimates your property's Market Value using comparable sales (Class 1), income capitalization (Class 2 and 4), or regulated utility approaches (Class 3). 2. Multiply Market Value by the LOA to get the tentative Assessed Value. 3. Apply the annual and five-year caps to arrive at the Transitional Assessed Value, if applicable. 4. Subtract any exemption amounts (STAR, senior citizen, veterans, disability, etc.) from the lower of Assessed Value or Transitional Assessed Value. This gives you the Taxable Assessed Value. 5. Multiply Taxable Assessed Value by the applicable class tax rate. 6. Add any applicable special assessments or abatements.

The result is your annual tax liability. Bills come twice a year (July and January for most properties). ^[3]

A concrete Class 1 example: market value $750,000, times 6% LOA equals $45,000 assessed. Assume the cap limits it to $43,000 transitional. Subtract $302 Basic STAR exemption (approximate 2024 value). Taxable assessed value is $42,698. Times 20.085% equals $8,578 annual tax.

For Class 2 co-ops and condos, Finance calculates the building's total assessed value using income methods, then allocates shares to individual units. This is why your co-op's per-unit tax may seem arbitrary and is a major source of disputes.

Want to understand the mechanics at the property tax level before getting into NYC specifics? That primer covers the national framework.

How does NYC estimate market value for each property class?

The methodology differs sharply by class, which matters if you are building an appeal argument.

Class 1 properties use comparable sales. Finance looks at arm's-length sales of similar homes in the same neighborhood within a recent period and applies a mass-appraisal model. The comparable sales data is available through the city's ACRIS database and the Finance website's rolling sales files. ^[5] If Finance uses comps that are dissimilar in size, age, or condition, you can challenge the market value estimate directly.

Class 2 and Class 4 properties use an income approach. Finance applies a capitalization rate to estimated net operating income (based on rent schedules, expense ratios, and vacancy assumptions published in Finance's income and expense study). This means a Class 2 rental building's taxes depend heavily on what Finance thinks comparable rentals earn, not what your specific building earns. You can submit actual income and expense statements (Schedule of Income and Expenses, Form TC201) to argue for a lower income-based value. ^[6]

Class 3 properties are regulated utilities and the methodology is set at the state level. Very few individual owners deal with Class 3.

For a sense of how other major cities approach valuation, the Philadelphia system is instructive, since it also uses mass appraisal but without NYC's class structure. See our Philadelphia property tax breakdown for comparison.

What exemptions reduce your NYC property tax bill?

Exemptions reduce your Taxable Assessed Value before the rate is applied. NYC offers several, and many homeowners miss them.

Basic STAR (School Tax Relief): available to owner-occupied primary residences with household income under $500,000. For properties with assessed value at or below $250,000 (the typical Class 1 range), the benefit is delivered as a check from New York State rather than a direct reduction starting with those who registered after 2015. ^[7] The check for the 2024-25 school year averages roughly $700 for basic STAR but varies by school district.

Enhanced STAR: for homeowners 65 and older with 2023 income at or below $98,700 (the 2024-25 threshold, adjusted annually). The Enhanced STAR exemption saves significantly more and stays as a direct assessment reduction. ^[7]

Senior Citizen Homeowner Exemption (SCHE): for owners 65+ with combined annual income at or below $58,399. Provides up to a 50 percent reduction in assessed value. Application deadline is March 15 for the following July tax year. ^[8]

Disabled Homeowners Exemption (DHE): mirrors SCHE income levels; provides up to 50 percent reduction for qualifying disabled owners. ^[8]

Veterans exemption: partial assessed value reduction for eligible veterans and their surviving spouses. The Alternative Veterans Exemption and the Eligible Funds exemption work differently; check Finance's veterans page for which applies to your property.

J-51 and 421-a: these are developer tax abatements on Class 2 and 4 properties, not typically available to individual homeowners, but if you own a condo in a building with such an abatement, your common charges may reflect it.

You apply for most exemptions through the NYC Department of Finance. Missing the March 15 deadline generally means waiting a full year for the benefit. Do not skip this step; a SCHE exemption alone can cut a senior's bill by several thousand dollars annually.

What is the Notice of Property Value and when do you get it?

Every January, Finance mails each property owner a Notice of Property Value (NOPV). This is the document that sets your assessment for the fiscal year beginning July 1. ^[3] It shows Market Value, Assessed Value, Transitional Assessed Value, any exemptions already applied, and the prior year comparison.

The NOPV is your starting gun. You have until March 1 (for most Class 1 properties) to file a complaint with the NYC Tax Commission if you believe the assessment is wrong. ^[9] For Classes 2, 3, and 4 the deadline is also March 1 but applications must be filed electronically through the Tax Commission's online portal.

You can look up any property's current and historical NOPV data through the NYC Department of Finance Property Tax Public Access web tool at nyc.gov/finance. ^[3] This is free and requires only the Borough-Block-Lot (BBL) number, which you can find on any tax bill.

The NOPV also tells you whether you are already receiving any exemptions. Cross-check it every year. Finance has been known to drop exemptions when a property transfers or when a senior's income certification lapses, and the owner may not notice until the bill arrives.

How do you challenge a NYC property tax assessment?

There are two paths: the NYC Tax Commission and, afterward, Article 7 of the New York Real Property Tax Law in State Supreme Court.

Step one is filing with the Tax Commission. For Class 1 properties, you file Form TC600 (one-, two-, and three-family homes). For Class 2 and 4 you file Form TC101 (income-producing property). Both are available at nyc.gov/taxcommission. ^[9] The March 1 deadline is firm. The Tax Commission will either make an offer to reduce your assessment or schedule a hearing.

If the Tax Commission offer is inadequate or you get no reduction, you can bring an Article 7 proceeding in State Supreme Court. You must file a petition within 30 days of receiving the Tax Commission's determination, or by the statutory period, whichever applies. Article 7 cases can produce larger reductions but require legal representation and real appraisal evidence. They make sense for high-value properties (roughly above $1 million in assessed value) where the potential savings justify the cost.

For Class 1 homeowners with more modest stakes, the Tax Commission route is genuinely DIY-friendly. You submit your own comparable sales, a recent appraisal if you have one, or evidence of errors in the property description (wrong square footage, extra bathroom counted that doesn't exist). You do not need an attorney.

This is exactly the kind of documentation workflow our property tax records guide walks through, and where the TaxFightBack DIY appeal kit gives you the exact forms and comp-selection methodology to build your own case without paying a contingency firm 25-35 percent of your savings.

For context on how other city assessment systems handle appeals, see our property tax lookup tool guide.

How does NYC property tax compare to other major metros?

Effective tax rates (actual taxes paid as a percentage of market value) vary enormously across cities, and NYC looks low on paper for Class 1 homeowners precisely because of the 6% LOA and the caps.

A 2022 Lincoln Institute of Land Policy study found that NYC Class 1 effective rates were among the lowest for single-family homes of any large U.S. city, often running 0.6 to 0.9 percent of market value for long-term owners. ^[10] That same study found Class 2 apartments and commercial properties bore much higher effective rates, sometimes three to four times higher, creating a structural subsidy for single-family homeowners at the expense of renters.

To put that in perspective: the national median effective property tax rate for single-family homes was approximately 0.90 percent in 2023 according to ATTOM Data Solutions, meaning NYC Class 1 homeowners near the lower end of that range are paying below the national average despite living in one of the most expensive housing markets in the world. ^[11]

That said, because NYC home values are so high, the absolute dollar amount of the bill is still large. A $1.5 million Brooklyn row house paying 0.7 percent effective still owes $10,500 per year.

For comparison on how other assessment-heavy metro areas structure their taxes, our guides on clark county property tax (Las Vegas) and oc property tax (Orange County, CA) show very different mechanics.

Are condos and co-ops taxed fairly compared to single-family homes?

Honestly, no, and this is the most documented inequity in the NYC system.

A 2021 report by the NYC Advisory Commission on Property Tax Reform found that condo and co-op owners in high-value buildings pay effective rates two to three times higher than single-family homeowners with comparable market values, because Finance values Class 2 condos using the income method (based on what similar rental buildings would earn) rather than comparable sales. ^[1] A condo in a doorman building on the Upper East Side that sold for $2 million might be taxed as if it were worth $800,000 based on rental income comparables, or it might be taxed on a higher income-based value depending on the building. The outcome is inconsistent and difficult to predict.

The Advisory Commission recommended moving all residential property to a market-value-based assessment, but as of mid-2025 the city has not enacted the reform. Legislative proposals have stalled repeatedly in Albany. ^[1]

If you own a condo or co-op and feel your assessment is high, your best argument is usually to show Finance's income assumptions are wrong: lower market rents than assumed, higher vacancy, or higher operating expenses. Form TC201 lets you submit actual building financials. A reduction in the building's total assessment flows through to your unit's share.

What are the most common errors that lead to over-assessment?

Wrong physical description is the most common and the easiest to fix. Finance relies on data from the Department of Buildings and historical records. If your home's square footage is recorded wrong, if extra bathrooms are listed that don't exist, or if a finished basement is coded as living space when it isn't, your market value estimate is inflated. Pull your property's record from the Finance RPAD (Real Property Assessment Database) at nyc.gov/finance and compare it to reality. ^[5]

Stale comparable sales are the second big one. Finance runs mass appraisal models annually, but the comps used in a declining market may not reflect recent price drops. If you can find three to five arm's-length sales of similar nearby homes that sold within the past six to twelve months at prices below what Finance's market value implies, that is a strong appeal argument.

Misclassification matters too. A property occasionally gets classified as Class 4 when it should be Class 1, or vice versa. This is rarer but when it happens the dollar impact is enormous.

Exemption lapses are the silent killer. A SCHE exemption that fell off because a required income renewal wasn't processed can cost a fixed-income senior $2,000 to $5,000 in a single year. Reinstating a dropped exemption is usually straightforward but requires filing before the deadline.

For a methodical look at how to build a comps-based argument, see our guide on values assessment.

What deadlines do NYC property owners need to track each year?

Missing a deadline in NYC typically means waiting a full year. Here are the key dates:

Deadline	What it covers
January (varies)	Notice of Property Value mailed by Finance
March 1	Last day to file Tax Commission appeal (all classes)
March 15	Last day to apply for most exemptions (STAR, SCHE, DHE, veterans)
June 1 (approx.)	Tax Commission hearings and offers begin
July 1	New tax year begins; new rates take effect
July 1 and January 1	Semi-annual tax bills due (most residential)
Within 30 days of TC determination	Deadline to file Article 7 court petition

The March 1 Tax Commission deadline is the one that trips people up. January NOPVs arrive and people set them aside. By February most have forgotten. The deadline has not moved in years, but always verify at nyc.gov/taxcommission before each filing season since the city can adjust by local law. ^[9]

If you miss the March 1 appeal deadline, you still have the exemption deadline on March 15 for most programs, and you can correct factual errors in property descriptions through Finance's administrative process at any time, though assessment corrections from that process typically take effect in the following year.

Frequently asked questions

What is the NYC property tax rate for 2024-2025?

For fiscal year July 1, 2024 through June 30, 2025, NYC tax rates are: Class 1 (1-3 family homes) 20.085%, Class 2 (co-ops, rentals, condos with 4+ units) 12.267%, Class 3 (utilities) 12.755%, and Class 4 (commercial/industrial) 10.646%. These rates apply to each property's Taxable Assessed Value, not its market value, so the effective rate as a percentage of market value is much lower.

How do I find out how my NYC property's assessed value was calculated?

Download your Notice of Property Value at nyc.gov/finance or look up your property using its Borough-Block-Lot number in the Finance RPAD database. The NOPV shows the city's estimated market value, the assessed value, any caps applied (transitional value), and any exemptions already deducted. If the physical description is wrong, that's your first line of appeal.

Why is my NYC condo taxed differently from my neighbor's brownstone?

Condos with more than three units fall in Class 2 and are valued using an income approach based on what similar rental apartments earn. Single-family brownstones are Class 1 and valued using comparable sales, with a 6% assessment ratio and stronger caps. The result is that comparable market-value properties in different classes can have radically different tax bills. This structural inequity is documented but has not been legislatively fixed as of 2025.

What is the STAR exemption and how much does it save?

STAR (School Tax Relief) is a New York State program that reduces school taxes for owner-occupied primary residences. Basic STAR is available to households with income under $500,000 and delivers an average benefit of roughly $700 per year as a state-issued check for most registrants. Enhanced STAR, for homeowners 65 and older with income at or below $98,700 (2024-25 threshold), provides a larger reduction as a direct assessment cut.

Can I appeal my NYC property tax assessment myself without a lawyer or tax rep?

Yes, especially for Class 1 properties. File Form TC600 with the NYC Tax Commission by March 1. Attach evidence: recent comparable sales, photos showing condition issues, or a corrected property description. The Tax Commission process does not require legal representation. If the Commission's offer is inadequate, escalating to Article 7 court proceedings does involve attorneys and appraisers, but most Class 1 homeowners resolve appeals at the Tax Commission stage.

What is the difference between Assessed Value and Taxable Assessed Value in NYC?

Assessed Value is the LOA fraction of market value (before caps). Transitional Assessed Value is the cap-limited version when applicable. Taxable Assessed Value is whichever of those is lower, minus any exemption amounts. Your tax rate applies to the Taxable Assessed Value. A property might have an Assessed Value of $50,000 but a Taxable Assessed Value of $38,000 after a SCHE exemption reduces it.

How much can NYC raise my Class 1 assessment in one year?

Under New York State Real Property Tax Law Section 1805, a Class 1 property's assessed value cannot increase by more than 6% in any single year and no more than 20% over any rolling five-year period. This cap is automatic and applied by Finance before your bill is calculated. If your NOPV shows a jump larger than these limits relative to the prior year, that is an error worth challenging.

What happens if I miss the March 1 NYC Tax Commission deadline?

You lose your right to appeal the current year's assessment. There is no extension process for the Tax Commission deadline. You can still correct factual errors in your property's physical description through Finance's administrative channels, but any resulting assessment change typically applies to the following tax year. Set a calendar reminder in January when the NOPV arrives.

Do rental property owners in NYC pay more property tax than homeowners?

In effective rate terms, yes. A 2021 NYC Advisory Commission report found that Class 2 rental and condo buildings pay effective rates two to three times higher than Class 1 homeowners with similar market values. This is because Class 2 properties carry a 45% LOA versus 6% for Class 1, and their caps are less protective. The higher effective rate for Class 2 is a primary reason apartment costs in NYC reflect embedded tax burdens that single-family owners don't face.

What is the Level of Assessment (LOA) in NYC property tax?

The LOA is the fraction of market value that becomes the assessed value before caps and exemptions. NYC sets it at 6% for Class 1 (1-3 family homes) and 45% for Classes 2, 3, and 4. A Class 1 home with a $500,000 market value has an initial assessed value of $30,000. A Class 4 building at $500,000 market value starts at $225,000. This is why comparing raw assessed values across classes is misleading.

How are NYC property taxes calculated for a co-op?

Finance values the entire co-op building using an income approach, then divides the total assessed value proportionally among units based on share ownership. You don't pay taxes directly; the co-op corporation pays and passes the cost through maintenance charges. To challenge the tax, the co-op board (not individual shareholders) must file a Tax Commission appeal for the building. Your maintenance breakdown should show the tax component.

Is there a senior citizen property tax exemption in NYC?

Yes. The Senior Citizen Homeowner Exemption (SCHE) reduces assessed value by up to 50% for homeowners 65 or older with combined annual income at or below $58,399. The Disabled Homeowners Exemption (DHE) has similar income thresholds. Both require application to the NYC Department of Finance by March 15. Income must be recertified periodically or the exemption lapses automatically.

How do I calculate my NYC property tax bill from scratch?

Find your property's Transitional Assessed Value on your NOPV. Subtract any exemption amounts to get Taxable Assessed Value. Multiply by your class tax rate (e.g., 20.085% for Class 1 in FY2025). The result is your annual tax. Divide by two for each semi-annual bill. Example: Taxable Assessed Value of $45,000 times 20.085% equals $9,038 per year, or about $4,519 per bill.

Where do I find NYC property tax rates and assessment data?

The NYC Department of Finance publishes current tax rates, the RPAD property database, rolling sales files, and individual NOPVs at nyc.gov/finance. The NYC Tax Commission at nyc.gov/taxcommission publishes appeal forms, instructions, and the income and expense schedules Finance uses to value Class 2 and 4 properties. Both sites are free and don't require registration to search property data by BBL.

Sources

1. NYC Advisory Commission on Property Tax Reform, Final Report 2021: The Advisory Commission found that condo and co-op owners in high-value buildings pay effective rates two to three times higher than single-family homeowners with comparable market values, and recommended moving all residential property to market-value-based assessment.
2. New York State Real Property Tax Law, Article 18 (NYC Property Classes and LOA): NYC property is divided into four tax classes with Levels of Assessment of 6% for Class 1 and 45% for Classes 2, 3, and 4.
3. NYC Department of Finance, Property Tax Rates and Billing: FY2025 (July 1, 2024 - June 30, 2025) tax rates: Class 1 20.085%, Class 2 12.267%, Class 3 12.755%, Class 4 10.646%; bills issued semi-annually.
4. New York State Real Property Tax Law Section 1805 (Assessment Change Caps): Class 1 assessed value cannot increase more than 6% in one year or 20% over five years; Class 2 properties under 11 units capped at 8% per year or 30% over five years.
5. NYC Department of Finance, RPAD (Real Property Assessment Database) and Rolling Sales Files: Finance publishes the RPAD database and rolling sales files used for Class 1 comparable-sales valuation, accessible by BBL number.
6. NYC Tax Commission, Form TC201 Income and Expense Schedule Instructions: Class 2 and Class 4 property owners may submit actual income and expense statements via Form TC201 to argue for a lower income-based assessed value.
7. New York State Department of Taxation and Finance, STAR Program: Basic STAR is available to owner-occupied primary residences with household income under $500,000; Enhanced STAR requires age 65+ and 2023 income at or below $98,700 for the 2024-25 benefit year.
8. NYC Department of Finance, SCHE and DHE Exemption Guidance: SCHE and DHE reduce assessed value by up to 50% for qualifying owners 65+ or disabled with combined annual income at or below $58,399; application deadline is March 15.
9. NYC Tax Commission, Appeal Process and Deadlines: Property owners must file Tax Commission complaints by March 1 each year; Class 1 owners use Form TC600, income-producing property owners use Form TC101.
10. Lincoln Institute of Land Policy, 'Significant Features of the Property Tax' 2022: NYC Class 1 effective property tax rates were among the lowest for single-family homes in any large U.S. city, often 0.6 to 0.9 percent of market value for long-term owners; Class 2 and commercial effective rates ran three to four times higher.
11. ATTOM Data Solutions, 2023 Property Tax Analysis: The national median effective property tax rate for single-family homes was approximately 0.90 percent in 2023.