On September 28, 2023, the New York City Council amended the property tax rates for fiscal 2024 (7/1/2023 – 6/30/2024). The tax year 2023/24 tax rates will now be as follows:
The tax class two (multi-family residential) rate is 12.502%, which is the highest rate since tax year 2018/19, and is 23.5 bps higher than last year. The tax class four (commercial) rate is 10.592%, the lowest rate since tax year 2019/20, and is 5.4 bps lower than last year.
These rates supersede the prior rates the Council adopted on June 30, 2023, when it passed the $107 billion budget for fiscal 2024. See our prior alert: NYC Property Tax Rates for 2023-2024. Those rates are no longer valid. Taxpayers will never see tax bills with those prior rates, and they will only see a change in the tax rates from 2022/23 to these new 2023/24 rates.
The NYC Department of Finance sent tax bills in early June for the first half of 2023/24 using last year’s 2022/23 rates. When DOF sends tax bills for the second half of 2023/24 in November, it will update the tax bills to reflect the new rates.
Why did this happen? The City Council shifted property tax burden from residential to commercial properties. They changed the tax rates because the original rates would have caused the tax burden on property tax class one (comprised of one-, two, and three-family homes) and property tax class two (most other residential property) to increase by 3.8% and 5.5% respectively as compared to 2022/23. When coupled with assessment increases, the original rates would have caused significant increases in the tax bills for residential homeowners. The effect of this change will reduce the class one property tax rate by 1.1% (as opposed to the aforementioned 3.8% increase), and moderate the increase of the class two property tax rate from the aforementioned 5.5% to 1.9%. The class four (commercial properties like office, retail, hotel) 2023/24 rate will be 0.5% lower than 2022/23.
October 24, 2023 is the deadline to file New York City real estate tax certiorari Article 7 petitions in the local county supreme court to preserve the challenge to the tax year 2023/24 property taxes.
If you have any questions or would like to discuss how you can reduce your New York City property taxes, please contact your trusted R&E attorney or Benjamin M. Williams, Head of the firm’s Property Tax Department, who authored the above.