NYC Property Tax Explained: How Your Bill Is Calculated

Your NYC property tax is your taxable assessed value times your tax class’s rate, minus any abatements. Taxable assessed value starts with the Department of Finance’s (DOF) estimate of market value, multiplied by 6% for Class 1 homes or 45% for everything else, limited by caps or phase-ins, then reduced by exemptions.

That chain is why two homes worth the same can have very different bills, and why a bill can rise when values fall. This guide walks through each step, then works two examples.

The calculation, step by step

1. 1

   DOF estimates market value

   For one- to three-family homes (Class 1), DOF uses statistical models of sales of similar nearby properties. For Class 2, state law requires DOF to value the property as if it produced income, so co-ops and condos are valued as if they were rental buildings. That’s why a condo’s DOF market value is often far below its sale price. See market value vs assessed value.
2. 2

   Apply the assessment level

   Multiply market value by 6% for Class 1 or 45% for Classes 2, 3 and 4. This is your target assessed value.
3. 3

   Apply caps or phase-ins

   Class 1 increases are capped at 6% a year and 20% over five years. Class 2 buildings with 10 or fewer units (2a, 2b, 2c) are capped at 8% a year and 30% over five years. For Class 2 buildings with more than 10 units and Class 4, changes are phased in at 20% a year over five years, and the bill uses the lower of actual or transitional assessed value. Physical improvements are added in full.
4. 4

   Subtract exemptions

   Exemptions, such as the Senior Citizen Homeowners’ Exemption, veterans’ exemptions, the legacy STAR exemption or J-51, reduce the assessed value. What’s left is the taxable value.
5. 5

   Multiply by the class tax rate

   Taxable value × the tax rate for your class = your annual tax before abatements.
6. 6

   Subtract abatements

   Abatements, such as the co-op and condo abatement, come off the tax amount itself, not the assessed value.

Current tax rates by class

The City Council sets the rates each year. The table shows the rates DOF publishes. Rates are written as a percentage of assessed value.

Why Class 1 and Class 2 rates look so different

A higher rate doesn’t mean a bigger bill. Class 1 homes are assessed at 6% of market value, while Class 2 is assessed at 45%. The city also divides the total tax levy between classes using a “class share” system. In DOF’s FY2027 tentative roll, Class 1 homes made up $822.2 billion of the city’s $1.659 trillion market value, about half, but only $28.2 billion of assessed value, compared with $126.7 billion for Class 2. The details are in NYC property tax classes 1–4.

Worked example 1: a house in Class 1

The numbers below are illustrative; your Notice of Property Value shows your actual figures.

The gap between $54,000 and $34,000 is common in Class 1. Caps hold the assessed value below the 6% target, so the bill can keep climbing for years until it catches up, even if prices flatten.

Worked example 2: a condo in Class 2

The abatement tier depends on the development’s average unit assessed value: 28.1% at $50,000 or less, 25.2% up to $55,000, 22.5% up to $60,000 and 17.5% above that. It only applies to a primary residence, and an owner can hold no more than three units in the development. More in co-op and condo tax abatement explained and the abatement estimator.

Exemptions and abatements that cut the bill

• STAR: new owners now get a state check (the STAR credit) instead of a reduction on the bill. See STAR credit vs STAR exemption.
• Senior and disabled homeowners: SCHE and DHE.
• Veterans: veterans exemption.
• Building programs: 421-a and J-51, which end on set schedules.

Not sure which apply to you? Try which NYC property tax breaks do you qualify for.

The yearly cycle

• Mid-January: DOF publishes the tentative assessment roll and sends Notices of Property Value.
• March: deadlines to challenge your value with the NYC Tax Commission (March 1 for Classes 2–4, March 15 for Class 1; in 2026 both fell on a Sunday and the deadlines were March 2 and March 16).
• May: DOF finalizes the assessment roll.
• June: DOF uses the final roll to generate the new fiscal year’s bills, generally about a month before the July 1 due date. Quarterly payers also pay October 1, January 1 and April 1; semiannual payers pay July 1 and January 1.

If something on your notice looks wrong, see how to appeal your NYC property assessment. To read the bill itself, see how to read and pay your NYC property tax bill.

Estimate your own bill

Plug your assessed value and class into the NYC property tax estimator. Buying? Add the tax to your monthly cost with the mortgage calculator and the true monthly cost of owning in NYC. You can also look up any building’s records on Roofy’s NYC building lookup.

This is general information. Your Notice of Property Value and DOF’s property tax pages are the official word for your property.