Why NYC Co-op and Condo Taxes Differ So Much From Houses

In New York City, one- to three-family houses pay about 0.7% of their city-assessed market value in property tax each year, while co-op and condo buildings pay roughly 4.7% to 5.1% of theirs. The gap comes from state law: houses are assessed at a lower percentage of value with tight caps, while apartment buildings are assessed at a far higher percentage and are valued as if they were rentals.

That does not mean a condo owner pays seven times what a homeowner pays on the same purchase price. The two are valued in different ways, which is the second half of the story. This guide uses the Department of Finance's own annual report to show where the gap comes from and how to read your own bill.

What "effective tax rate" means here

Your bill is calculated as assessed value × tax rate, minus exemptions and abatements. The tax rate on your bill (for tax year 2026: 19.843% for Class 1, 12.439% for Class 2) looks like it favors apartments. It does not, because the assessed value it applies to is a very different fraction of market value for each class.

An effective tax rate strips that out: tax divided by market value. In the charts below, Roofy divides DOF's published tax figures by DOF's own market values from the FY2025 Annual Report of the New York City Real Property Tax. The figures are before abatements and credits such as the co-op/condo abatement or STAR.

Three things stand out. Large co-op, condo and rental buildings all sit between about 4.5% and 5.1%. Small two- to ten-family apartment buildings sit in the middle, because state law caps their assessment growth. And one- to three-family houses pay well under 1%.

Reason 1: different assessment ratios and caps

DOF sets assessed value as a fixed percentage of market value, and that percentage depends on your class.

The caps matter as much as the ratios. When house prices rise faster than 6% a year, the Class 1 assessment cannot keep up, so over time many homes are assessed well below 6% of their market value. Across all Class 1 property in FY2025, the billable assessed value was about 3.5% of DOF market value, not 6%. In large co-op and condo buildings it was about 38% to 41%.

Reason 2: the class shares are fixed in law

The city first decides how much it needs to raise in total, then splits that levy among the four classes using a formula set by state law. DOF reports the cap on how far those shares can shift each year. The result is that each class's share of the tax moves slowly, whatever happens to market values.

The pattern has held for twenty years. Class 2 has paid between about 3.0% and 4.0% of its market value, while Class 1 has paid between about 0.5% and 0.8%.

Reason 3: co-ops and condos are valued as if they were rentals

This is the part that partly offsets the gap. State law requires DOF to value all Class 2 property, including co-ops and condos, as income-producing rental buildings, based on typical rents and expenses for similar buildings, not on what apartments actually sell for. DOF's own page says the law requires it to value co-ops and condos "as if they were rental buildings, even though they are not income-producing." Houses, by contrast, are valued from recent sales of similar homes.

For many co-ops and condos, the rental-style DOF value is well below what the apartments would sell for. So the effective rate measured against the price you paid is usually lower than the 4.7% to 5.1% in the chart. How much lower depends entirely on your building.

The co-op and condo abatement narrows the gap a little

To soften the difference, eligible co-op and condo units can get a partial abatement. In FY2025, DOF reports four abatement levels (28.1%, 25.2%, 22.5% and 17.5%), applied to 307,659 units in 7,492 developments, worth about $695 million in total. Eligibility rules and how the level is set are in the co-op and condo abatement guide, and you can estimate yours with the abatement estimator.

How to find your own effective rate

1. Open your Notice of Property Value or property tax bill on the DOF site. For a co-op, ask the managing agent for the building's bill and your share of it (see how to read your NYC property tax bill).
2. Note the DOF market value, the assessed value and the tax after abatements and exemptions.
3. Divide the annual tax by the DOF market value (the official effective rate), and by your purchase price or a recent sale in your building (your real-world rate).
4. If the DOF market value looks too high for a house, or out of line for your building, you can challenge it. See how to appeal your assessment.

What this means if you are buying

• Compare carrying costs, not prices. A condo's taxes and a co-op's maintenance (which includes the building's taxes) can be several times a similarly priced house's tax bill. Run the numbers with the NYC property tax estimator.
• Check the abatement and any expiring benefits. A building whose 421-a or J-51 benefit is ending will see taxes rise. See the 421-a and J-51 expiry calculator.
• Expect the system to change slowly, if at all. The class structure is set in state law, so any reform would have to come from Albany.

For the basics of each class, read NYC property tax classes 1–4 and market value vs assessed value.