New York City collected $31.8 billion in property taxes during fiscal year 2025, making it the single largest source of city revenue. As a Licensed Associate Broker with Keller Williams NYC, I walk every buyer through the property tax math before they make an offer, because NYC property tax works nothing like the rest of the country. In my 25+ years selling in Manhattan, Queens, and Brooklyn, I have seen buyers shocked by tax bills and sellers miss exemptions worth thousands. This guide covers everything you need to know about NYC property tax in 2026.
NYC's Four Property Tax Classes
NYC groups all real property into four tax classes, each with different assessment ratios and rate caps. This system is unique to New York City and is the main reason property tax here confuses newcomers.
| Tax Class | Property Types | Assessment Ratio | FY2025 Tax Rate |
|---|---|---|---|
| Class 1 | 1-3 family homes, small condos | 6% | 19.573% |
| Class 2 | Co-ops, condos, rental buildings (4+ units) | 45% | 12.267% |
| Class 3 | Utility companies | 45% | 12.289% |
| Class 4 | Commercial, office, retail | 45% | 10.694% |
Source: NYC Department of Finance, FY2025 Final Tax Rates
How NYC Property Tax Is Actually Calculated
Here is the formula: Market Value x Assessment Ratio x Tax Rate = Annual Tax. But the critical detail is that NYC's "market value" is not your apartment's sale price. The Department of Finance determines a separate assessed market value, which for Class 2 properties (co-ops and condos) is based on the building's income, not comparable sales. This is why a $1.5 million condo might have a lower tax bill than a $600,000 single-family home.
Co-op Tax Treatment
Co-op buildings are assessed as a single entity under Class 2. The building pays one tax bill, and each shareholder's portion is included in their monthly maintenance. This means co-op owners do not receive an individual tax bill. Instead, the managing agent will provide a letter each year showing your proportional share of the building's property tax, which is deductible on your federal taxes (subject to the $10,000 SALT cap). For more on co-op ownership, see my co-op vs. condo comparison.
Condo Tax Treatment
Condo owners receive their own individual tax bill. Each condo unit has its own BBL (borough, block, lot) number and is assessed independently. However, the building as a whole is still classified as Class 2, so the assessment is based on income approach, not sale price. Newer condos often benefit from 421-a tax abatements that significantly reduce the tax burden for 10-25 years.
Key Insight: The Assessment Cap Advantage
Class 1 properties (1-3 family homes) are capped at 6% assessment increases per year and 20% over five years. Class 2 properties are capped at 8% per year and 30% over five years. These caps mean that in rapidly appreciating neighborhoods, longtime owners can have dramatically lower taxes than new buyers at the same price point.
NYC Property Tax Exemptions and Abatements
STAR Program (School Tax Relief)
The Basic STAR exemption is available to homeowners with household income of $500,000 or less. Enhanced STAR is for owners 65+ with income of $98,700 or less. New applicants register through the New York State DTF rather than the city. STAR can save homeowners roughly $300-$700 per year depending on the property.
Senior Citizen Homeowner Exemption (SCHE)
Owners 65 or older with combined income under $58,399 may qualify for a 5-50% reduction in assessed value. This applies to co-ops (through the building) and condos/houses directly. The application is filed annually with NYC DOF.
Veterans Exemptions
NYC offers three levels of veterans property tax exemptions: Alternative Veterans (based on service period and combat), Eligible Funds (based on use of eligible funds to purchase), and Cold War Veterans. These can be combined with other exemptions and provide meaningful tax reductions.
Tax Abatement Programs
Abatements differ from exemptions: an abatement directly reduces the tax bill dollar-for-dollar. The most significant abatement program in NYC has been the 421-a (now replaced by 485-x), which phases in over 10-25 years on new construction. If you are buying a newer condo, always ask when the abatement expires, because the tax increase can be dramatic.
Active NYC Listings
Properties currently available across NYC
34-29 87TH Street
Jackson Heights
30 E 37th Street #8-G
Murray Hill
Listing information provided courtesy of the Real Estate Board of New York's Residential Listing Service (RLS). Information is deemed reliable but not guaranteed. Sale listings verified. ©2026 REBNY. RLS data displayed by Keller Williams NYC.
How to Check Your NYC Property Tax Bill
The NYC Department of Finance property inquiry tool at propertyinquiry.finance.nyc.gov lets you search any property by address or BBL. You can view the current assessed value, tax class, exemptions, and actual tax bill. I recommend every buyer check this before making an offer, and every owner review it annually. If you suspect your property is over-assessed, you can file a challenge with the NYC Tax Commission before March 1 for Class 2 and March 15 for Class 1 each year.
NYC Property Tax Compared to Other Markets
NYC (Manhattan Condo)
- Effective rate: ~0.8-1.2% of market value
- $1M condo: ~$8,000-$12,000/year
- Assessment based on income approach
- 421-a abatement can reduce to near zero
Westchester / Long Island
- Effective rate: ~2.0-2.8% of market value
- $1M home: ~$20,000-$28,000/year
- Assessment based on comparable sales
- No significant abatement programs
This comparison surprises many buyers considering leaving NYC. A $1 million house in Westchester may carry a property tax bill 2-3x higher than a $1 million condo in Manhattan. For buyers weighing the NYC suburbs, my Hudson Valley real estate guide covers more on suburban tax differences.
What Buyers Need to Know About NYC Property Tax
When evaluating a one-bedroom or two-bedroom purchase, always calculate the post-abatement tax cost. A condo with a 421-a expiring in two years will see a substantial monthly carrying cost increase. Ask your agent (or me) to pull the abatement schedule from the offering plan. Combine that with your closing costs estimate for a complete picture of total ownership cost.
Bottom Line
NYC property tax is complex, but understanding your tax class, assessment ratio, and available exemptions can save you thousands of dollars annually. I walk every Keller Williams NYC client through these numbers as part of the buying or selling process. If you want a personalized property tax analysis for a specific property, reach out and I will run the numbers for you.
