In this blog post, we review how the property tax changes when the Actual Assessed Value doubles. Does the property tax double when the value doubles?
Assumptions:
- No renovation or construction or demolition, and therefore no physical increases in the assessed value. All assessed value increases are “equalization” due to changes in overall market conditions.
- Stable tax rate. In reality, tax rates change every year. We’ll assume a 12.5% tax rate, which approximates the tax class 2 tax rate.
- No exemptions and no abatements.
- Not in tax class 1, 2A, 2B, 2C. These are the “protected” tax classes where assessed value increases are limited or “capped” each year.
- +3% per year annual increases in the Actual Assessed Value, except for the doubling year.
To minimize the harm of sudden and dramatically large tax increases, the city has a Transitional Assessed Value. Increases in the Actual Assessed Value (AAV) are phased-in over five years. 20% of this year’s change in AAV plus 40% of last year’s change in AAV plus 60% of the prior year’s change in AAV, etc. The shortcut calculation is: the Transitional AV is the running five-year average Actual AV.
See how the NYC Department of Finance (DOF) explains Transitional:

Source: TAX019 TC2 Guide 2024.indd (nyc.gov)
And how the Independent Budget Office (IBO) explains it:

Source: taxstability2102011.pdf (nyc.ny.us)
The Billable AV is the lesser of the Transitional and Actual AVs. In this example, the Billable AV is always the Transitional AV because the Transitional AV is playing catch-up to the ever-increasing Actual AV. Think of the Actual AV as where you’re headed in terms of Billable AV, and the Transitional AV as a stepping stone to get there.
In our example below, the Actual AV doubles from tax year 2023/24 to 2024/25. In the prior year, 2023/24, the tax was $11,793. In 2024/25, the first year of the AAV doubling, the tax increased 23.6%. It did not double. Following 2024/25, tax increases of 19.6%, 16.9%, 14.9%, and 13.4%. Finally, five years after the AAV doubled, the annual increases re-stabilize at +3% per year.

In the four years from 2023/24 to 2027/28, the property tax increased 98.6%, which is essentially a doubling (just shy of 100% or 2x).
In the five years from 2023/24 to 2028/29, the property tax increased 125%, or 2.25x.
You can see the importance of monitoring your Assessed Value every year. DOF publishes the tentative assessment roll on January 15th, and you only have until March 1st to protest the AV with the Tax Commission.
This is not legal advice.