New York City’s property tax system confuses almost everyone, including long time homeowners. Assessed value is not the same as market value, and two similar homes in different boroughs can pay dramatically different taxes. The system is decades old, politically sensitive and slow to change.

Here’s what NYC homeowners need to know.

Assessed Value vs Market Value

NYC does not tax you on what your home could actually sell for. Instead, it calculates a market value estimate and then applies an assessment ratio. For one family and two family homes (Class 1), the assessed value is capped at six percent of market value and increases are limited per year.

This is why longtime owners often have lower taxes than new buyers.

Why Taxes Feel Uneven

NYC divides properties into classes:

• Class 1: one to three family homes

• Class 2: multifamily and coops

• Class 3 and 4: utility and commercial

Class 1 homes are protected from sharp tax increases. Class 2 buildings are not. That’s why two Brooklyn buildings with similar values can pay completely different taxes, they’re taxed under separate rules.

Neighborhoods with rising prices, like many parts of Staten Island and Bay Ridge, still show artificially low assessments because of the cap system.

What Homeowners Should Watch

• Assessment notices each January

• Market value jumps that don’t match local sales

• Tax class accuracy

• Exemptions for veterans, seniors and primary residences

Understanding the assessment system helps homeowners challenge errors and plan long term.

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Joseph Ranola | Five-Star Staten Island & South Brooklyn Realtor® (30 + Google reviews)
Associate Broker · Matias Real Estate | Founder · Bridge & Boro Team
Serving 103xx and 11209 / 11214 / 11228 | $25 M + closed volume
📞 917-716-1496 | ranolarealestate.com