- New York City’s taxable property value rose 5.01% to $308.52B, setting the stage for higher property tax bills across most asset classes.
- Apartment buildings, condos, co-ops, offices, and hotels all saw assessed values increase, with trophy offices facing a $1.20 PSF tax increase.
- Rising property taxes add another layer of expense pressure for owners already navigating higher operating costs and uneven market fundamentals.
According to Commercial Observer, New York City property owners should prepare for higher tax bills in fiscal 2027 after the city’s final assessment roll showed taxable values rising across most major property categories.
The Department of Finance’s final assessment roll, released May 26, showed citywide taxable property values increased 5.01% to $308.52B, while market values climbed 5.27% to $1.66T. The increases affect nearly every asset class, from single-family homes and apartment buildings to office towers and hotels, with tax bills due beginning July 1.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Higher Assessments Across Asset Classes
The latest assessment roll highlights the continued appreciation of New York real estate despite ongoing challenges in parts of the market. The number of Class 1 properties changed little year over year. Assessors still raised their values significantly.
Class 1 market values rose 5.16%, while taxable values increased 3.53%. The city’s inventory of Class 1 homes grew by only 12 units year over year, reaching 1,096,944 properties. Manhattan added 23 Class 1 homes and Queens added 361, while the Bronx, Brooklyn, and Staten Island all recorded declines.
The data shows property values continued to rise despite limited housing inventory across the five boroughs.
The Details
Multifamily properties saw some of the largest increases in assessed values. The number of Class 2 units, which includes apartments in buildings with four or more units, rose by 16,241 units to 2.05M.
According to the Department of Finance data cited by Commercial Observer, Class 2 market values increased 6.65% while taxable values rose 4.86%. Staten Island was the only borough to post a decline in Class 2 inventory, falling 3.25%.
The higher assessments translate directly into larger tax bills. Average annual taxes on Class 1 homes are projected to rise $272 to $7,927. Taxes on regulated rental units are expected to increase $22 per apartment, while unregulated rental units face a much larger jump of $1,062 per unit. Condo owners are projected to pay an additional $676 annually per unit, while co-op taxes are expected to rise by $394 per apartment.
Commercial Owners Face Added Pressure
Commercial property owners are also looking at meaningful increases. Trophy office buildings are expected to see taxes rise $1.20 PSF, bringing average taxes to $23.58 PSF. Class B office buildings face a smaller increase of $0.44 PSF, reaching $15.31 PSF.
Hotels face higher tax obligations while operators absorb higher labor costs from new union contract provisions. Hotel taxes are projected to rise from $12.50 PSF to $13.09 PSF, while luxury hotel taxes increase from $15.16 PSF to $15.75 PSF.
Brooklyn led the city with a 7.17% increase in taxable value. Staten Island recorded the smallest taxable value growth at 3.77%, despite market values increasing 5.68%, reflecting statutory caps that limit assessment growth.
Why It Matters
Higher taxes add pressure for office owners as leasing fundamentals remain uneven. Trophy buildings continue to outperform lower-quality assets. Even so, the additional $1.20 PSF tax burden raises costs. Landlords must offset those costs through stronger rents or higher occupancy.
Class B properties, many already competing for tenants through concessions and capital improvements, face less dramatic increases but operate with thinner margins.
Multifamily owners face a similarly mixed environment. While assessed values continue to climb, rent regulations limit revenue growth for many properties. The contrast between the modest increase for regulated rental units and the much larger increase for unregulated apartments reflects the city’s differentiated tax treatment, but both categories face higher ownership costs.
What’s Next
The assessment roll establishes the values for fiscal 2027 tax bills. City officials still need to set final tax rates. The City Council will determine those rates as part of the budget process before bills are finalized.
City officials often adjust tax rates after reviewing how the tax burden falls across property classes.
