New York City property taxes are among the highest in the nation, and the amount you pay depends on your property type, location, and the assessed value the city assigns to your building
The effective tax rate in New York City ranges from roughly 0.85% to 1.6% of a property's assessed value, depending on the class of property. A homeowner with a house assessed at $500,000 might pay between $4,250 and $8,000 per year. A condo owner in the same price range could pay differently because condos fall into a separate tax class with its own rate. The actual dollar amount you owe is determined by multiplying your property's assessed value by the tax rate for your property class, then explore any exemptions you may have.
New York City divides property into four tax classes, and each class has a different tax rate set by the city each fiscal year. Class 1 covers one- to three-family homes and small residential buildings. Class 2 includes larger apartment buildings and condos. Class 3 is utility property. Class 4 covers commercial, industrial, and other properties. Because Class 1 and Class 2 properties are assessed differently and taxed at different rates, two homes worth the same amount can have very different tax bills.
Key Takeaways
- New York City property tax rates vary by property class, with Class 1 homes (one to three families) typically paying lower effective rates than Class 2 (larger residential buildings and condos).
- Your tax bill is calculated by multiplying your property's assessed value by the tax rate for your class, so understanding your assessment is as important as knowing the rate.
- The city reassesses properties on a rolling schedule, and your assessment can change even if you have not made improvements, which affects your tax bill.
- Homeowners may reduce their tax bill through exemptions like the Primary Residence Exemption, the Senior Citizen Homeowners' Exemption, or the Disabled Persons' Exemption.
- You can challenge your assessment through the city's formal objection process if you believe the assessed value is too high.
How the City Calculates Your Assessment
The Department of Finance assigns an assessed value to your property, and that value is the foundation of your tax bill. The assessed value is not the same as the market value or the price you paid. The city uses a complex formula that considers recent sales of comparable properties, the condition of your building, and other factors. For Class 1 properties, the assessment is typically a percentage of market value that is lower than for other classes—this is one reason homeowners in one- to three-family homes often pay lower effective tax rates.
Assessments are updated on a rolling schedule. In Manhattan, most properties are reassessed every year. In the other boroughs, the cycle is longer—typically every three years in some areas and every five years in others. This means your assessment can change even if you have not made any changes to your home. If the neighborhood has appreciated or if comparable sales have risen, your assessed value may increase, and so will your tax bill.
You can look up your property's assessed value on the Department of Finance website by entering your address. The assessment roll is public information, and knowing your assessed value is the first step to understanding whether your tax bill is reasonable.
Tax Rates by Property Class and How They Change Year to Year
The city sets tax rates for each property class every fiscal year, beginning July 1. The rates are expressed as a dollar amount per $100 of assessed value. For example, if the Class 1 rate is $1.75 per $100 of assessed value, a property assessed at $500,000 would owe $8,750 in tax before exemptions. Class 2 rates are typically higher per $100 of assessed value than Class 1 rates, which is why condo owners often pay more in tax than single-family homeowners with properties of similar market value.
Rates change annually based on the city's budget and the total assessed value of all properties in each class. If the city needs more revenue, rates may increase. If total assessed values across a class rise significantly, the rate may decrease even if the city's overall tax revenue stays the same. The city publishes the rates for the coming fiscal year in late spring, so you can see what your new rate will be before your bill arrives.
Exemptions That Can Lower Your Tax Bill
New York City offers several exemptions that reduce your assessed value or your tax bill directly. The Primary Residence Exemption reduces the assessed value of a one- to three-family home or condo that is your primary residence. The reduction amount varies by neighborhood and is recalculated annually, but it typically reduces your assessed value by $15,000 to $35,000 depending on where you live. You must own the property and live in it to may have access to.
The Senior Citizen Homeowners' Exemption provides a reduction in assessed value for homeowners age 65 or older with a household income below a certain threshold (the threshold changes annually but is typically around $29,000 to $37,000 depending on household size). The Disabled Persons' Exemption offers a similar reduction for owners with disabilities. The Cooperative Housing Exemption applies to co-op apartments and reduces the assessed value of the entire building, which lowers the tax bill for all shareholders.
If you think you may have access to for an exemption, you explore through the Department of Finance. The process process varies by exemption type, and important date are set each year. Missing a important date typically means waiting until the next process period, so it is worth checking the Department of Finance website to see which exemptions explore to your situation and when to file.
How to Challenge Your Assessment if You Think It Is Too High
If you believe your property's assessed value is too high, you can file a Tentative Assessment Review (TAR) or a Formal Objection with the Department of Finance. The TAR is a simpler, faster process available only in certain years and only for properties in specific assessment cycles. A Formal Objection is available every year and is the standard way to challenge an assessment.
To file a Formal Objection, you submit a form to the Department of Finance within 30 days of receiving your assessment notice. You will need to provide evidence that your assessment is too high—this might include recent appraisals, comparable sales in your neighborhood, or documentation of property defects. The city will review your submission, and if they agree your assessment is too high, they will lower it. If you disagree with their decision, you can appeal to the Tax Commission, which is an independent body that hears property tax disputes.
Many homeowners hire a property tax attorney or assessor to help with a challenge, especially if the property is valuable or the assessment seems significantly off. The cost of hiring help must be weighed against the potential savings. If your assessment is lowered, your tax bill will drop when ready, and the savings will continue in future years.
Why New York City Property Taxes Are High
New York City's property tax rate is high compared to many other parts of the country because the city relies heavily on property tax revenue to fund schools, police, fire, sanitation, and other services. Property taxes make up a large share of the city's budget, whereas other cities or states may rely more on income tax, sales tax, or state funding. The city's high cost of living and high property values also mean that even a moderate tax rate produces large dollar amounts.
Additionally, New York State law limits how much the city can increase property tax revenue each year, which is called the tax levy limit. This means the city cannot straightforward raise rates without limit. However, as property values rise, assessed values rise, and homeowners' bills increase even if the rate stays the same. This is one reason why property tax bills in New York City have grown significantly over the past two decades.
What Happens If You Do Not Pay Your Property Tax Bill
Property tax bills in New York City are due on the date shown on your bill. If you do not pay by the due date, you will owe a late payment penalty and interest. The penalty starts at 0% if you pay within 30 days of the due date, but increases to 10% if you pay more than 30 days late. Interest accrues at 7% per year on the unpaid balance.
If your bill remains unpaid for an extended period, the city can place a lien on your property, which means the city has a legal claim against it. If the debt is not resolved, the city can eventually foreclose and sell your property to recover the unpaid taxes. If you are having trouble paying your bill, contact the Department of Finance to discuss payment plans or hardship options. The city offers installment plans for property owners who cannot pay in full.
Frequently Asked Questions
How often do property tax bills come in New York City?
Property tax bills are issued four times per year in New York City, typically in July, October, January, and April. Each bill covers a three-month period. You can pay all four bills at once or pay each one separately by its due date.
Can I deduct my New York City property taxes on my federal income tax return?
Yes, you can deduct state and local property taxes (SALT) on your federal return, but the total deduction for all state and local taxes combined is capped at $10,000 per year. This cap applies to all homeowners regardless of how much you pay in property tax.
What is the difference between assessed value and market value?
Market value is what your home would sell for on the open market. Assessed value is what the city determines for tax purposes, and it is often lower than market value. The city uses assessed value to calculate your tax bill, not market value.
Do condos pay more property tax than single-family homes?
Condos are taxed in a different class than single-family homes, and the effective tax rate for condos (Class 2) is typically higher than for one- to three-family homes (Class 1). Two properties with the same market value may have different tax bills because of their property class.
Can I get a property tax refund if my assessment is lowered?
Yes. If your assessment is lowered through a challenge or correction, the city will refund the overpaid taxes for the current fiscal year and adjust future bills. Refunds are typically issued within a few months of the assessment change.