Updated May 1, 2026 — Fiscal Year 2026 rates verified against the NYC Department of Finance. If you own property in New York City, the most important number on your tax bill is not the dollar amount. It is the single digit next to the words “Tax Class.” That digit — 1, 2, 3, or 4 — decides which formula the city uses to calculate your bill, how fast your assessed value can rise, and which exemptions you qualify for. This guide explains all four classes in plain English, with the actual FY2026 tax rates, the form numbers you need, the agency phone (311 from inside NYC, 212-639-9675 from outside), and the underlying law (New York Real Property Tax Law §1802 and NYC Administrative Code §11-202).
The 30-second answer: which class am I in?
Class 1 is the box almost every homeowner falls into: one-, two-, or three-family homes, plus most small condos in buildings of three stories or fewer. Class 2 covers all other residential property — apartment buildings with four or more units, most co-ops, and most condos in buildings taller than three stories. Class 3 is utility company equipment (think Con Edison transformers and gas mains). Class 4 is everything commercial and industrial — offices, stores, factories, warehouses, and most vacant land that is not zoned residential.
You can confirm your class on your most recent Notice of Property Value, on your quarterly tax bill, or by looking up your property at the Department of Finance Property Information Portal: a836-pts-access.nyc.gov/care.
FY2026 NYC property tax rates by class
The Council adopted these rates for Fiscal Year 2026 (July 1, 2025 through June 30, 2026). They are the rates printed on the bill you are paying right now:
- Class 1 — 19.843% (down from 20.085% in FY2025)
- Class 2 — 12.439% (down from 12.500%)
- Class 3 — 11.108% (down from 11.181%)
- Class 4 — 10.848% (up from 10.762%)
These rates are published by the NYC Department of Finance and verified at nyc.gov/site/finance/property/property-tax-rates.page. Rates change every year when the Council adopts the budget. Do not use a rate from a tax-prep blog without checking the date.
Why your bill is not just “rate × market value”
Here is the part that confuses almost every new New York property owner: the city does not tax your market value. It taxes your assessed value, and the gap between the two is enormous, especially for Class 1.
State law (RPTL §1805) sets a level of assessment for each class:
- Class 1: 6% of market value
- Class 2: 45% of market value
- Class 3: 45% of market value
- Class 4: 45% of market value
So a Class 1 row house with a $1,000,000 market value has a target assessed value of $60,000 — and the 19.843% tax rate is applied to that $60,000, not the million. Run the math: $60,000 × 0.19843 = $11,906 before any exemptions. That is roughly 1.19% of true market value, which is why New York City property taxes feel low compared to most New Jersey or Long Island towns even though the headline rate looks high.
The Class 1 assessment cap: 6% per year, 20% over five years
Class 1 owners get one of the most powerful protections in American property tax law. NYC Administrative Code §11-208.1 caps the increase in your assessed value at 6% per year and 20% over any five-year period, regardless of how much your market value rises. This is why long-time owners in Park Slope, Forest Hills, and Riverdale often pay a small fraction of what a recent buyer next door pays — the cap follows the property, not the owner, but it resets when major construction triggers a physical change.
The Class 2 cap: 8% per year, 30% over five years
Co-op and condo owners in Class 2 buildings of 10 units or fewer get an 8%/30% cap. Larger Class 2 buildings, Class 3, and Class 4 properties do not get caps on assessed value — instead, increases are phased in over five years using something called transitional assessed value. That is why a new commercial tower’s tax bill ramps up slowly even as the market value jumps the day it opens.
Class 1 in detail: 1–3 family homes and small condos
If you own a brownstone, a row house, a detached single-family in Staten Island, or a three-family in the Bronx, you are almost certainly Class 1. So is most vacant land zoned residential, and condos in buildings of three stories or fewer (Section 581 of the Real Property Tax Law treats them as condos but at the Class 1 level of assessment).
FY2026 rate: 19.843%. Applied to 6% of market value, with the 6%/20% cap.
Available exemptions: Basic STAR and Enhanced STAR (income-tested for seniors), Senior Citizen Homeowners Exemption (SCHE), Disabled Homeowners Exemption (DHE), Veterans Exemption, Clergy Exemption, and the Cooperative and Condominium Tax Abatement (only if you live there as your primary residence).
Forms you might file: Form RP-425-IVP (STAR Income Verification), Form SCHE-Initial (Senior Citizen Homeowners), Form RPTL-466-c (Volunteer Firefighter/Ambulance Worker), and the Form NYC-RPIE only if your Class 1 property has rental income above the threshold. STAR enrollment now happens through the New York State Department of Taxation and Finance, not NYC DOF — apply at tax.ny.gov/star or call 518-457-2036.
Class 2 in detail: rental buildings, co-ops, and condos
Class 2 is where it gets crowded. If you live in a co-op apartment in a 200-unit building on the Upper West Side, you are a Class 2 owner — even though you do not get a tax bill personally. The building gets the bill, and your share is folded into your monthly maintenance.
Class 2 itself is split into sub-classes:
- Class 2a: 4–6 unit rental buildings
- Class 2b: 7–10 unit rental buildings
- Class 2c: 11+ unit co-ops and condos that elected the Class 2c valuation
- Class 2 (general): everything else, including most large rental buildings and most large condos
FY2026 rate: 12.439%. Applied to 45% of “actual” assessed value or transitional assessed value (whichever is lower for buildings over 10 units).
The big one for co-op and condo owners — the abatement. The NYC Cooperative and Condominium Tax Abatement reduces your share of the building’s tax bill by 17.5% to 28.1% depending on average unit assessed value, but only if the unit is your primary residence and you submit a valid application through your managing agent. Co-op and condo boards file Form CCA-1 with DOF every year. Owners who bought in the last 12 months and missed the deadline can ask the board to file an amended application.
Other Class 2 forms: Form RPIE (Real Property Income & Expense) — required for most Class 2 properties with 11+ units and any with gross income over $40,000; deadline is June 1 each year, with stiff penalties for non-filing. The form is at nyc.gov/site/finance/property/property-rpie.page. The DOF RPIE help line is 212-440-5300.
Class 3 in detail: utility company equipment
You will almost never deal with Class 3 unless you work in regulatory affairs at Con Edison, National Grid, Verizon, or one of the other regulated utilities. Class 3 covers special franchise property and the equipment of utility companies — the substations, the gas distribution mains, the telephone poles, the underground electric cable. The state, not the city, originally values most of it (NY Real Property Tax Law Article 6) and then certifies the value to NYC.
FY2026 rate: 11.108%. Applied to 45% of assessed value. There is no cap and no transitional phase-in for most Class 3 property.
Why does this matter to a regular homeowner? Because Class 3 is shrinking as a share of the city’s tax base, and when it shrinks, the burden shifts to Classes 1, 2, and 4. The annual class-share adjustment is the political fight you read about every May when the City Council debates the property tax levy.
Class 4 in detail: commercial and industrial
Office towers, hotels, retail storefronts, factories, warehouses, gas stations, parking lots, and most large vacant lots are Class 4. So is your dentist’s professional condo, even if it sits inside what looks like a residential building.
FY2026 rate: 10.848%. Applied to 45% of actual or transitional assessed value (whichever is lower). Increases phase in over five years.
Class 4 abatements you should know about:
- ICAP (Industrial and Commercial Abatement Program): up to 25 years of abatement for new construction or major renovation outside Manhattan south of 96th Street. Application deadline is before construction begins. Form CP-2 and CP-9; info at nyc.gov/site/finance/property/icap-icip.page.
- 421-a (and its successor 485-x): for residential new construction, primarily Class 2 but with Class 4 implications during construction.
- J-51: for renovating older multi-family residential — the program lapsed in June 2022, was reauthorized as “Affordable Housing from Commercial Conversions Tax Incentive Benefits” (AHCC) under Tax Law §467-m for office-to-residential conversions, and continues to apply to projects that vested before the lapse.
Class 4 RPIE: Most Class 4 properties with assessed value over $40,000 must file Form RPIE every year by June 1. Failure to file blocks you from filing a Tax Commission appeal the following spring.
Why Class 1 owners pay so much less than Class 2 and 4
This is the single most-asked question we get from new homeowners. Two answers, both correct:
First, the level of assessment. Class 1 is taxed on 6% of market value. Class 2 and Class 4 are taxed on 45% of market value. That is a 7.5x ratio before any exemption is applied.
Second, the class share system. State law freezes each class’s share of the total tax levy from year to year, with small adjustments. Because Class 1’s share is locked in below its actual share of citywide market value, Class 1 owners get a structural break that the City Council cannot easily undo. Tenants, co-op shareholders, and Class 4 owners have been pushing for class-share reform for two decades; in 2026 the debate continues but the law has not changed.
How to read your bill — the four-line cheat sheet
Pull out your most recent quarterly bill or open your Notice of Property Value. Find these four lines:
- Tax Class: the digit (1, 2, 3, or 4)
- Market Value: what DOF thinks your property would sell for
- Assessed Value (Billable): what they actually multiply the rate by
- Tax Rate: the FY2026 rate from the table at the top of this guide
Multiply line 3 by line 4 and you should get within a few dollars of the gross tax before exemptions and abatements. If you do not, call DOF at 311 (or 212-639-9675 from outside the city) and ask for the property tax unit, or visit a Department of Finance Business Center in person — Manhattan, Bronx, Brooklyn, Queens, and Staten Island each have one.
If your class looks wrong
It happens — usually after a renovation, a subdivision, or a condo declaration is filed. If you bought a townhouse and DOF has it as Class 2 instead of Class 1, file Form NYC-RPIE-RP-602 (Application for Correction) or contact the Tax Map office. If the class change went the wrong direction and you are facing a higher rate, you can also file a Tax Commission appeal using Form TC101 (residential) or Form TC150 (large income-producing) by the March 1 deadline (March 15 for Class 1). Tax Commission information is at nyc.gov/site/taxcommission or 212-669-4410.
Quick exemption and deadline calendar
- January 15: Tentative assessment roll published
- March 1 / March 15: Tax Commission appeal deadline (Class 2/3/4 / Class 1)
- March 15: Senior Citizen Homeowners Exemption (SCHE) renewal
- May 25: Final assessment roll
- June 1: RPIE filing deadline for Class 2 and Class 4
- July 1: New fiscal year begins, new tax rates take effect
Where to get free help
The NYC Department of Finance does not charge for any of this. Free, official help is available at:
- NYC 311 (dial 311, or 212-NEW-YORK / 212-639-9675 from outside the city) — general property tax questions and appointments at any of the five borough Business Centers
- DOF Property Tax Unit: in-person at 66 John Street, Manhattan; 210 Joralemon Street, Brooklyn; 144-06 94th Avenue, Queens; 1932 Arthur Avenue, Bronx; 350 St. Marks Place, Staten Island
- NYC Tax Commission (assessment appeals): 212-669-4410, nyc.gov/site/taxcommission
- NY State Department of Taxation and Finance (for STAR): 518-457-2036, tax.ny.gov
- NYC Bar Pro Bono Property Tax Clinic: 212-626-7383 — free legal help for low-income owners facing tax-related foreclosure
The bottom line
Your tax class determines your rate, your assessed-value cap, and which exemptions you can stack. Class 1 owners pay the lowest effective rate in the system thanks to a 6% level of assessment and the 6%/20% cap. Class 2 owners — co-ops, condos, and rental owners — face higher effective rates but get the 17.5%–28.1% Cooperative and Condominium Abatement if the unit is a primary residence. Class 3 owners are mostly utilities. Class 4 owners run the city’s commercial economy and pay the second-highest effective rate after the small Class 1 rental segment.
If you take one thing away from this guide: before you appeal, before you apply for an exemption, and before you sign anything a tax-grievance company puts in front of you, look up your property class and your assessed value yourself at a836-pts-access.nyc.gov. Then call 311 and ask DOF directly. There is no charge, the agents are usually well-informed, and the answer is the official one.
Tax disclaimer: Tax advice in this article is informational. Consult a tax professional or the NYC Department of Finance for your specific situation.
Primary sources for this article: NYC Department of Finance, “Property Tax Rates” (FY2026), retrieved May 1, 2026; NYC Department of Finance, “Property Assessments” and “Calculating Your Property Taxes”; New York Real Property Tax Law §1802 and §1805; NYC Administrative Code §11-202 and §11-208.1.
