Overview
NYC property tax rates vary significantly by property tax class. The combination of different assessment ratios and tax rates creates vastly different effective tax rates for different property types.
Current Tax Rates (FY 2025-2026)
- Class 1 (1-3 family residential) - Tax Rate: ~20.3% of assessed value. Assessment ratio: 6% of market value. Effective rate: ~1.2% of market value.
- Class 2 (4+ unit residential, co-ops, condos) - Tax Rate: ~12.3% of assessed value. Assessment ratio: 45% of market value. Effective rate: ~5.5% of market value (before caps).
- Class 3 (Utility) - Tax Rate: ~12.0% of assessed value. Assessment ratio: varies.
- Class 4 (Commercial, industrial) - Tax Rate: ~10.7% of assessed value. Assessment ratio: 45% of market value. Effective rate: ~4.8% of market value.
Why Rates Seem Contradictory
Class 1 has the highest nominal tax rate (~20%) but the lowest effective rate because its assessment ratio is only 6% of market value. Class 4 has a lower nominal rate (~10.7%) but a higher effective rate because it is assessed at 45% of market value.
Assessment Caps
Class 1 and 2 properties benefit from assessment increase caps that limit how quickly assessed value can rise. Class 1: max 6% per year, 20% over 5 years. Class 2: max 8% per year, 30% over 5 years. Class 4 has no caps, meaning assessments can jump to full market value in a single year.
Tax Exemptions and Abatements
Many NYC properties benefit from exemptions (reducing assessed value) or abatements (reducing the tax bill). Common programs include STAR, Senior Citizen Homeowner Exemption, 421-a, J-51, ICIP, and various religious/nonprofit exemptions.
Frequently asked
What is the NYC property tax rate?
It depends on property class. Effective rates range from about 1.2% of market value for Class 1 (small residential) to about 5.5% for Class 2 (large residential) and 4.8% for Class 4 (commercial). These are approximate and change annually.
Why are co-op and condo taxes so high?
Co-ops and condos fall in Class 2, assessed at 45% of market value with a ~12.3% tax rate. While assessment caps provide some protection, the effective rate is significantly higher than for Class 1 single-family homes.
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