How NYC property tax bill is calculated
Posted by Wei Min Tan on February 27, 2022
The New York City property tax is the city’s main source of revenue. When viewing a property listing online, the NYC property tax is provided as a monthly amount but is paid quarterly. Your property tax bill shows your current and past due property tax charges, exemptions, abatements, credits and general information about how your property tax is calculated.
Below are guidelines on how the NYC Class 2 property tax bill is calculated. Class 2 property is defined as coop, condo and rental buildings with 4+ units.
1. Determine market value
The market value of a Class 2 property is determined based on its income producing potential. The income and expenses of rental properties that are similar in size, location, number of units, and age are used as comparables in the statistical modeling.
2. Determine assessed value
The actual assessed value of Class 2 properties is calculated by multiplying the property’s market value by 45 percent. According to New York state law, assessed value increases for buildings with 10 or less units is limited to 8 percent per year or 30 percent over five years.
3. Determine transitional assessed value
Changes to the assessed value of Class 2 properties with 11+ units are phased in over a five-year period. If there are multiple phase-ins in a year, this results in a transitional assessed value. To arrive at your property tax bill, NYC takes the lower of the actual assessed value or the transitional assessed value.
4. Apply exemptions on file
Seniors, veterans, clergy members, persons with disabilities, and homeowners can benefit from tax exemptions and abatements offered by the City of New York. The condo/coop abatement is a key exemption for property owners using the property as their primary residence.
If you are given an exemption, it is deducted from your property’s assessed value, lowering the taxable value.
5. Property Tax Bill
To calculate your annual property tax, NYC multiplies the taxable value of your property by the current tax rate for your property’s tax class. The rate for Class 2 properties as of 2022 is 12.235 percent. Any abatement is deducted from your tax bill if your property is eligible.
Note that property tax rates change each year, as well as the value of exemptions and abatements.
Property tax calendar
January: Notice of property value sent to property owners.
February 15: Deadline to apply for condo/coop abatement. Managing agents apply on behalf of unit owners.
March 1: Deadline to challenge your market or assessed value.
May: Final assessment roll released.
June: Mailing of first property tax bill for upcoming tax year.
July: New tax year begins.
November: New tax rate is determined, if July bill is based on the prior year’s tax rate.
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