How a NYC Condo Property Tax Estimate Works

Updated Oct 11, 2026 · 6 min read

Step 1: The City's "Market Value"

A listing's tax figure comes from an estimate in the offering plan, usually prepared by a tax consultant hired by the developer. We read the tax sections of 1,377 NYC condo offering plans filed since 2020 to see how they're put together.

NYC's Department of Finance doesn't tax you on what you paid. It values condo buildings as if they were rental buildings, based on the rent they could earn. That's why a condo's official market value is usually far below its sale prices. The tax consultant's first job is to estimate what that value will be once the building is finished. About 83% of recent plans mention market value in their tax explanation.

Step 2: Assessed Value (45%)

Buildings with four or more apartments are Tax Class 2. For Class 2, the city taxes 45% of market value, called the assessed value. Small buildings of one to three units can be Tax Class 1, which uses a much lower 6% ratio but a much higher tax rate.

Good to know: the class can change when a building becomes a condo. The plan for 1532 45th Street, a building of 4 apartments in Borough Park, notes its tax class will change from Class 1 to Class 2C.

Step 3: The Tax Rate

The assessed value is multiplied by that year's Class 2 tax rate. Plans quote the rate in effect when they were filed. The rate plans quote most often for each tax year:

Plans whose text names a city tax year and a Class 2 rate together. Years where fewer than 3 plans quote the same rate are left out.

Put steps 2 and 3 together, and Class 2 taxes come to roughly 5.6% of the city's market value a year (45% × about 12.5%).

Step 4: Your Share

Once the building is a condo, every apartment gets its own tax lot and its own bill. But the plan's estimate usually starts with a building total and divides it by common interest, the percentage of the building each apartment owns. About 84% of recent plans describe this split. One plan's version: the total "is then divided between the units in proportion to their common interest percentage" (838 41st Street, Sunset Park).

Across recent plans, the median estimate is about $8,664 per unit a year, or $9.84 per square foot a year (724 buildings). See our property tax benchmarks.

The catch: the city isn't bound by the sponsor's split. Many plans warn that the Department of Finance may assess individual apartments differently once they get their own lots.

Step 5: Abatements, and When They End

This is where estimates and real bills part ways. If a building qualifies for a tax break, the first-year estimate includes it, and the plan should say how long it lasts.

• 421-a was the classic new-construction program. It's fading: 20 to 37 NYC condo plans a year cited it from 2017 through 2022, and only 6 to 9 a year in the full years since. More in the end of the 421-a era.
• ICAP (the Industrial and Commercial Abatement Program) now shows up more often than 421-a, in 84 plans filed from 2023 to 2026. But it's a break for commercial space, and many plans say it applies only to the stores or community space, not the apartments. Read the details before counting on it.

When an abatement ends, it usually steps down over several years. Some examples from offering plans:

• 838 41st Street, Sunset Park: the plan puts the building's assessed value at $121,483 with 421-a and $485,931 without it. At the plan's 12.719% rate, that's about $15,450 a year in taxes with the exemption, versus about $61,800 without (our math, from the plan's figures): roughly 4 times as much.
• 3031 Brighton 5th Street, Brighton Beach: 421-a benefits are "progressively phased out at 20% per year over the last four years" of a 15-year term.
• Lucky NY, Queens: the plan warns that carrying charges would be "40% to 50% more" if 421-a benefits aren't granted.
• Radiant, Long Island City: the plan describes a full ICAP abatement for eleven years, then phasing out at 80%, 60%, 40% and 20%.
• Wanlong, Greenwood: the plan says its ICAP abatement phases out "by 20% increments per year" from year 12 through year 15.

The catch: look up how many years of the abatement are left when you buy, not when the building was finished. Buying in year 10 of a 15-year abatement means paying full taxes much sooner.

Why the First Year Can Look Low

• No phase-in for new buildings. When the city raises an existing building's assessment, the increase is phased in over five years. Plans routinely point out that this phase-in doesn't apply to new construction, which is added in full.
• "First full tax year." Many estimates are for the first full tax year after construction is complete. If the building was still unfinished on the city's valuation date, the current bill can be lower than what's coming.
• Rates change. The estimate uses the rate when the plan was filed. Nobody can promise next year's rate.

Our property tax benchmarks flag this too: projections are often based on an assessment made before construction is finished or with an abatement in place.

Who Pays Before Your Apartment Has Its Own Tax Bill?

At first, the whole building is one tax lot. Plans handle this a few ways. At 38 Skillman Avenue in Williamsburg, the sponsor pays the full tax bill until the apartments are separately assessed, and each buyer reimburses their common-interest share at closing. At 220 East 9th Street in the East Village, the condo board pays and collects from owners. Either way, expect a tax adjustment on your closing statement.

Can You Challenge Your Taxes?

Yes. Almost every plan we read (96%) covers tax certiorari, the legal process for challenging an assessment. Usually the plan says no challenge is pending and gives the condo board the power to file one for all owners. Once apartments are separately assessed, some plans make each owner responsible for their own.

How to Check a Building's Tax Estimate

• Find the tax section in Part I of the offering plan, and the tax consultant's letter, often in the back.
• Look for the abatement, its name, its start year and its phase-out schedule.
• Compare the per-square-foot tax with similar buildings on our property tax benchmarks. A much lower number usually means an abatement.
• Check the amendments. Later amendments often update the tax estimate. See how to find offering plan amendments.

Read any building's plan on The Condo Book Project, or search "condos with a 421-a tax abatement."

Related: The 421-a Tax Break Is Fading From NYC Condos · Boutique vs. Tower Condos in Brooklyn