NYC property tax rates and what they mean for your bill

New York City property taxes are not a single flat rate. Instead, the city divides properties into four classes, and each class pays a different percentage of its assessed value. Class 1 (one- to three-family homes) pays roughly 0.855% of assessed value. Class 2 (apartment buildings) pays roughly 1.6%. Class 3 (utility companies) and Class 4 (commercial and industrial) pay higher rates that vary by property type.

Your actual bill depends on three numbers: the property's assessed value, the tax rate for its class, and the total amount the city needs to collect that year. The city sets the assessed value, not the market value. A home worth $800,000 on the market might be assessed at $300,000, and your tax bill is calculated on that $300,000 figure. This is why two identical homes on the same block can have very different tax bills.

The city publishes a tax rate each year in June. For the 2024–2025 fiscal year, Class 1 properties paid approximately $9.23 per $1,000 of assessed value. This means a Class 1 home assessed at $300,000 would owe roughly $2,769 in property tax. Class 2 rates were approximately $17.37 per $1,000 of assessed value. These rates change annually based on the city budget.

Key Takeaways

  • NYC property tax is calculated by multiplying your property's assessed value by the tax rate for your property class, not by the market price of your home.
  • Class 1 properties (one- to three-family homes) pay the lowest rate; Class 2 (apartment buildings) pays roughly double; Class 3 and Class 4 pay higher rates still.
  • The city reassesses properties periodically, and your assessed value can change even if you do not sell, which raises or lowers your tax bill.
  • You can challenge your assessed value through the Department of Finance's assessment review process if you believe it is too high.
  • Tax bills are due in four quarterly installments, and the city sends bills to the property owner on record, not to the tenant.

How the city determines your assessed value

The Department of Finance assesses every property in the city. For Class 1 homes, the city uses a statistical model based on recent sales of similar properties in your neighborhood. The model looks at sale prices, property size, condition, and location to estimate what your home would sell for, then applies a standard percentage to arrive at the assessed value. This percentage, called the assessment ratio, is roughly 6% for Class 1 properties, meaning a home that would sell for $500,000 is typically assessed at around $30,000.

For Class 2 properties (apartment buildings), the city uses the income approach: it estimates the building's annual rental income, subtracts operating expenses, and capitalizes that net income to arrive at a value. A building that generates $100,000 in net annual income might be assessed at $1.25 million, depending on market conditions.

The city does not reassess every property every year. Instead, it works through neighborhoods on a rolling schedule. When your neighborhood comes up for reassessment, the Department of Finance sends you a notice with your new assessed value. This notice includes the date by which you can file an objection.

Exemptions and abatements that reduce your bill

Several programs reduce property tax for specific owners. The Senior Citizen Homeowners' Exemption reduces the assessed value for homeowners age 65 and older with household income below $29,289 (as of 2024; this limit changes annually). The exemption reduces your assessed value by a percentage that depends on your income, potentially cutting your tax bill by 5% to 50%.

The Disabled Persons' Exemption works similarly for owners with a disability, with the same income limit. The Cooperative Housing Tax Exemption applies to shares in housing cooperatives that meet certain affordability standards. The J-51 Tax Abatement reduces taxes for buildings that undergo major renovation, typically for 8 to 12 years after the work is completed.

If your building receives a tax abatement, the city reduces your tax bill by a set amount each year. The abatement does not change your assessed value; instead, the city simply subtracts the abatement from your bill before you pay. When the abatement expires, your bill returns to the full amount based on your assessed value at that time.

How to read your property tax bill

Your tax bill arrives in the mail four times per year: in July, October, January, and April. Each bill covers a three-month period and shows your assessed value, the tax rate for your property class, and the amount due. The bill also lists any exemptions or abatements applied.

At the top of the bill, you will see your property's tax block and lot number (also called the BBL). This is the city's unique identifier for your property and is useful if you need to look up your property record online or file a challenge. The bill shows the due date for that quarter's payment, usually 30 days from the bill date. If you pay late, the city charges interest at 7% per year plus a late fee.

You can pay online through the Department of Finance website, by mail, or in person at a borough tax office. Some owners set up automatic quarterly payments through their bank to avoid missing a due date.

Challenging your assessed value

If you believe your assessed value is too high, you can file a Tentative Assessment Review (TAR) or a Complaint of Assessment (COA) with the Department of Finance. The TAR is available only during a narrow window after you receive your assessment notice—usually 30 days. The COA can be filed anytime during the fiscal year and is the more common route.

To file a COA, you submit a form to the Department of Finance with evidence that your assessed value is wrong. Evidence can include a recent appraisal, a recent purchase price (if you bought the property within the last few years), or comparable sales of similar properties in your neighborhood. You do not need a lawyer, though some owners hire one to prepare the case.

The Department of Finance reviews your submission and either agrees to lower your assessment, denies your challenge, or offers a compromise. If you disagree with the result, you can appeal to the Tax Commission, which is a separate city agency. The Tax Commission holds a hearing where you can present your case. This process can take 6 to 18 months from filing to final decision.

What happens if you do not pay your property tax

If you miss a payment, the city charges interest at 7% per year on the unpaid amount. After 30 days, a late fee is added. If you remain unpaid for more than a year, the city can place a lien on your property, meaning it has a legal claim against the home. If the debt grows large enough and remains unpaid for several years, the city can foreclose and sell the property to recover the tax debt.

If you are having trouble paying, contact the Department of Finance to discuss a payment plan. The city sometimes offers installment agreements that allow you to spread the debt over several months or years. You must request this before the city files a lien.

Frequently Asked Questions

Why is my neighbor's tax bill so different from mine if we live on the same block?

The assessed values can differ because the city's model accounts for differences in property size, condition, recent renovations, and the exact sale prices of comparable homes. If your neighbor's home sold recently, that sale price influences the assessment for similar homes nearby. If your home has not sold in many years, its assessed value may not reflect current market conditions.

Does my property tax bill go up automatically every year?

Not automatically. Your bill changes only if your assessed value changes (during a reassessment cycle) or if the city's tax rate changes. The tax rate changes annually based on the city budget, but your assessed value may stay the same for several years until your neighborhood is reassessed. When reassessment happens, your assessed value can go up or down depending on recent sales in your area.

If I rent my apartment, who pays the property tax?

The property owner pays the property tax bill. Tenants do not receive tax bills. However, landlords often factor property tax into the rent they charge, so tenants indirectly bear part of the cost. Rent-stabilized tenants in New York have some protection against large rent increases, but market-rate tenants have no such protection.

Can I deduct NYC property tax on my federal income tax return?

Yes, you can deduct property tax paid on your primary residence or a second home, up to $10,000 per year total for all state and local taxes (including income tax, sales tax, and property tax combined). This is a federal deduction, not a New York State or NYC deduction. You must itemize deductions on your federal return rather than taking the standard deduction for this to benefit you.

What is the difference between assessed value and market value?

Market value is what your home would sell for today. Assessed value is what the city estimates for tax purposes, and it is usually much lower. The city uses a standard assessment ratio (roughly 6% for Class 1 homes) to keep assessed values well below market value. This protects homeowners from tax bills that spike with the real estate market, but it also means your tax bill does not directly reflect your home's current worth.