What is a NYC property actually assessed on?

The four numbers, in the order they are built

• Market value: Finance's estimate of what the property is worth. The Tax Commission's own form states the legal definition, the price for which a property would ordinarily sell on the open market, based on its condition, ownership and use as of January 5.
• Assessed value: market value multiplied by the level of assessment, 6% in tax class 1 and 45% in classes 2, 3 and 4, then modified by the caps for classes 1, 2a, 2b and 2c.
• Transitional assessed value: for the classes that get one, the assessed value with changes phased in at 20% a year over five years.
• Taxable value: the lower of the actual and transitional assessed values, minus exemptions. That is the number the rate is applied to.

The caps, and the properties they never reach

The caps are also why an assessed value can climb in a year when the market falls. Finance publishes its own worked example of a one to three family home: market value 100,000, then 150,000, then 140,000, against an assessed value that goes 6,000, then 6,360, then 6,741. The assessment is still climbing in year three because it is catching up to a rise it was not allowed to absorb in year two.

Effective market value, the number an appeal has to beat

This is the single most misread line on a Notice of Property Value, and Finance is direct about what it does: if the property has an effective market value, you will need to prove that your current market value is less than the effective market value in order to win your Tax Commission appeal. Not less than the market value printed at the top. Less than this one.

It is the capped assessed value converted back into a market number, so it is calculated by dividing the assessed value before exemptions by the assessment ratio: by 6% for tax class 1, by 45% for classes 2a, 2b and 2c. On a property whose caps have held the assessment down for years, the effective market value can sit well below the market value on the same notice, and an appeal that proves the market value is too high can still lose.

The five-year phase-in

Class 2 properties with more than ten units and all class 4 properties are not capped. Their assessment changes are phased in instead, 20% of the change each year for five years, and because a new change starts a new five-year transition every year, several are usually running at once. The tax is charged on whichever is lower, the actual assessed value or the transitional one.

How does Finance arrive at market value?

By a different method per class, which is why a class 2 argument looks nothing like a class 1 argument. For class 1 Finance uses statistical modeling on prices of similar properties that sold in the neighbourhood in the prior three years. For class 2 state law mandates that it value the property as income-producing, based on income and expenses, and the law requires co-ops and condos to be valued as if they were rental buildings even though they are not income-producing.

That last sentence is Finance's own, and it is the reason a co-op or condo owner who brings recent sale prices to an appeal is often bringing the wrong evidence. The building is being valued as a rental it is not.

The rate is not the argument

The rates Finance currently publishes are labelled tax year 2026, which is the fiscal year that ran to June 30, 2026: 19.843% for class 1, 12.439% for class 2, 11.108% for class 3 and 10.848% for class 4. The 2026-27 rate has not been adopted. Finance's own guide says it cannot calculate the 2026-27 tax until the new rate is established by the City Council, and that until then you pay the 2025-26 rate, with rates frequently not finalised until November and the earlier part of the year then recalculated.

The test before you file

Form TC600 reduces the whole question to arithmetic. Take your own estimate of the property's market value, multiply it by the class assessment ratio, and compare the result to the actual assessed value on the notice. If it is lower, there is an over-assessment to argue about. Its own worksheet is blunter still: if the difference is zero or less, do not file an application for correction.

The filing that follows is on the Tax Commission page, its dates are on the deadlines page, and if the class itself is wrong then the ratio and the caps are wrong with it, which is the tax class page. MGNY builds these valuation cases for 2,500+ properties a year: 212-343-1111.