New York City Property Tax Levy and Provisional Rates for Fiscal Year 2027: Final Rates Could Still Change

New York City has completed its initial process for determining the real property tax levy and setting property tax rates for Fiscal Year 2027, covering the tax year that began July 1, 2026, and ends June 30, 2027. 

On June 30, 2026, the City Council adopted property tax rates using the statutory 5% Class Shares Cap. Those rates are currently in effect, but they should be treated as provisional because pending State legislation could authorize the Council to select a lower cap and adopt different final rates later this year. If the bill is not signed or the Council does not act under it, the June 30th rates remain the operative rates. 

Lowering the Class Shares Cap has become the rule rather than the exception. Since Fiscal Year 2018, the cap has been reduced below the statutory 5% default in every completed fiscal year except Fiscal Year 2022. If Albany and the Council act again for Fiscal Year 2027, this will be the ninth such adjustment in ten fiscal years. 

Determining the Fiscal Year 2027 Property Tax Levy 

The City’s adopted Fiscal Year 2027 budget totals approximately $125.842 billion. After accounting for approximately $88.652 billion of estimated revenue from income taxes, sales taxes, business taxes, State and federal aid, and other sources, the City determined that it needs to raise a net $37.190 billion through ordinary real property taxes. 

$125.842 billion – $88.652 billion = $37.190 billion 

The City then added approximately $2.695 billion to account for anticipated uncollectible taxes, refunds and collections attributable to prior-year levies. This produces a gross Fiscal Year 2027 real property tax levy of approximately $39.885 billion. 

$37.190 billion + $2.695 billion = $39.885 billion 

The Fiscal Year 2027 levy is approximately $1.908 billion, or 5.0%, greater than the Fiscal Year 2026 levy of approximately $37.977 billion. For longer-term perspective, the levy was approximately $14.291 billion in Fiscal Year 2007. The Fiscal Year 2027 levy is therefore approximately 179% greater – nearly 2.8 times the Fiscal Year 2007 levy. 

The Council’s revenue estimate also separately includes $500 million from the new High-Value Secondary Home Property Surcharge, commonly known as the pied-a-terre tax, among revenues other than regular real property taxes. That distinction is important: the regular property tax rates discussed below are separate from the pied-a-terre surcharge rates and calculations. 

Allocating the Levy Among the Four Tax Classes 

New York City real property is divided into four tax classes: 

Tax class	General description
Class 1	One-, two- and three-family homes
Class 2	Most other residential property, including rental buildings, cooperatives and condominiums
Class 3	Utility property
Class 4	Commercial and industrial property

 

Each class pays a percentage of the total levy known as its class share. The Class Shares Cap does not directly limit tax rates or individual tax-bill increases. Instead, it limits how much a class’s share of the overall citywide levy may increase from the prior year. 

Before applying the 5% cap, the State-prescribed calculations produced the following prospective Fiscal Year 2027 current base proportions: 

Class	FY 2026 class share	Prospective FY 2027 share	Prospective change
Class 1	14.2990%	17.1953%	+20.3%
Class 2	39.1540%	39.3200%	+0.4%
Class 3	8.2814%	7.7758%	-6.1%
Class 4	38.2656%	35.7089%	-6.7%

 

Without the Class Shares Cap, Class 1’s share of the levy would have increased by more than 20% in a single year. The default 5% cap limited the Class 1 current base proportion to approximately 15.0140%, with the excess shifted to Classes 3 and 4. 

After the additional adjustments required for new construction, demolition, changes in tax-class status and other physical and quantity changes, the Council adopted the following provisional adjusted base proportions: 

Class	FY 2026 final share	FY 2027 provisional share	FY 2027 class levy	Change in class levy
Class 1	14.2990%	14.8692%	$5.931 billion	+9.2%
Class 2	39.1540%	39.1050%	$15.597 billion	+4.9%
Class 3	8.2814%	8.3526%	$3.331 billion	+5.9%
Class 4	38.2656%	37.6732%	$15.026 billion	+3.4%
Total	100.0000%	100.0000%	$39.885 billion	+5.0%

 

The longer-term class-share data show a gradual shift in the allocation of the levy. From Fiscal Year 2007 to the provisional Fiscal Year 2027 figures, Class 4’s share declined from 40.6320% to 37.6732%, while Class 2’s share increased from 36.5105% to 39.1050% and Class 3’s share increased from 7.6277% to 8.3526%. Class 1’s share declined modestly from 15.2298% to 14.8692%. 

Another useful historical point is that the nominal citywide tax rate has remained at 12.283% since Fiscal Year 2010. Over that same period, however, total taxable billable assessed value grew from approximately $141.849 billion in Fiscal Year 2010 to $308.516 billion in Fiscal Year 2026, while the levy grew from approximately $17.588 billion to $37.977 billion. A stable citywide rate therefore does not mean stable property taxes: changes in assessments, class shares, exemptions and abatements continue to change individual tax bills and the aggregate burden borne by each class. 

Every class’s aggregate levy increases under the provisional Fiscal Year 2027 calculations – even Class 4, whose tax rate decreases. This illustrates why a declining tax rate does not necessarily mean that aggregate taxes, or the taxes on a particular property, will decline. 

Provisional Fiscal Year 2027 Property Tax Rates 

The Council’s initially adopted rates, compared with the final Fiscal Year 2026 rates, are as follows. All rates are per $100 of assessed value: 

Tax class	FY 2026 final rate	FY 2027 provisional rate	Percentage-point change	Relative change
Class 1	19.843%	20.909%	+1.066	+5.4%
Class 2	12.439%	12.440%	+0.001	Approximately 0.0%
Class 3	11.108%	11.108%	0.000	0.0%
Class 4	10.848%	10.658%	-0.190	-1.8%

 

A rate of 20.909% is the same as $20.909 of annual tax for every $100 of taxable assessed value. 

The most notable historical development is the Class 1 rate. At 20.909%, it would be higher than any Class 1 rate since Fiscal Year 2021 and the fourth-highest rate in the Fiscal Year 2010 through Fiscal Year 2027 period shown in the City’s historical data. Only the Fiscal Year 2019 rate of 20.919%, the Fiscal Year 2020 rate of 21.167%, and the Fiscal Year 2021 rate of 21.045% were higher. 

The Class 2 rate would remain essentially unchanged. The Class 3 rate would remain at 11.108% for a second consecutive year, its lowest level since Fiscal Year 2017. The Class 4 rate would decline from 10.848% to 10.658%, bringing it close to its Fiscal Year 2023 and Fiscal Year 2024 levels. 

The 5% Class Shares Cap May Not Be Final 

The default Class Shares Cap under State law is 5%, but a 5% cap has frequently been the exception rather than the rule. From Fiscal Years 2007 through 2026, special State legislation permitted a cap below 5% in 16 of 20 years, including a 0% cap in seven years. More recently, the cap was 0% for Fiscal Years 2023 and 2024, 0.9% for Fiscal Year 2025, and 1.0% for Fiscal Year 2026. 

Last year, the Governor signed the enabling legislation on October 27, 2025, and the Council adopted revised Fiscal Year 2026 rates using a 1% cap on October 29, 2025. DOF then issued updated November tax bills for payment due January 1, 2026. The lower cap shifted part of the burden away from Classes 1 and 3 and toward Classes 2 and 4. See our prior coverage: NYC Final Property Tax Rates for 2025/26. 

For Fiscal Year 2027, A.11234/S.10273 passed both houses of the State Legislature on June 4, 2026, but, as of July 22, 2026, had not yet become law. The legislation would authorize the City Council to select a Fiscal Year 2027 cap of no more than 5%, provided the Council acts by December 1, 2026. It also expressly authorizes revised tax rates and amended tax bills if the ordinary bills have already been issued. 

Illustrative Rates With a 1% or 0% Cap 

I modeled the Fiscal Year 2027 rates using the Council’s existing levy, assessment-roll data and physical-change adjustment factors, but replacing the 5% Class Shares Cap with illustrative caps of 1% and 0%. I ran these hypothetical analyses to help estimate potential final tax rates so my clients can use them for their individual property tax budgeting purposes. 

For the 1% illustration, Class 1’s current base proportion was capped at 1% above its Fiscal Year 2026 share, Class 2 was left at its prospective share because its calculated increase was already below 1%, and the additional share removed from Class 1 was allocated between Classes 3 and 4 in the same proportions reflected in the Council’s June 2026 calculation. 

Tax class	Adopted 5% cap – provisional	Illustrative 1% cap	Calculated 0% cap
Class 1	20.909%	20.111%	19.910%
Class 2	12.440%	12.439%	12.385%
Class 3	11.108%	11.209%	11.415%
Class 4	10.658%	10.798%	10.842%

 

Source: New York City Council reports and exhibits dated June 30, 2026; not official, author’s calculations. Rates are per $100 of assessed value. 

The 0% result is more mechanically determinate than the 1% result. With a 0% cap, neither Class 1 nor Class 2 could increase its current base proportion above the prior year’s adjusted base proportion. In the Fiscal Year 2027 calculations, the amounts removed from Classes 1 and 2 would exactly restore the prospective decreases in Classes 3 and 4. The subsequent physical-change adjustments produce the estimated rates shown above. 

Even a 0% Class Shares Cap would not freeze Class 1’s tax rate. The estimated Class 1 rate would still rise slightly from 19.843% to approximately 19.910%, because the cap does not limit growth in the total levy, changes in the taxable assessment base, or the physical-change adjustments applied after the current base proportions are established. 

A 1% Cap Does Not Produce One Automatic Set of Rates 

The Council has discretion over how to distribute the share removed from Class 1 among the other classes, subject to the cap applicable to each receiving class. A 1% cap therefore does not mathematically dictate one exact rate for Classes 2, 3 and 4. 

At the outer mathematical limits, a 1% cap could produce approximately the following rate ranges: 

Tax class	Approximate range with a 1% cap
Class 1	20.109% to 20.114% (approximately 20.11%)
Class 2	12.437% to 12.512%
Class 3	10.721% to 11.530%
Class 4	10.668% to 10.900%

 

Not all of those endpoints are equally likely. They show the limits of the Council’s allocation discretion rather than a prediction of how the Council would vote. The illustrative 1% rates of 20.111%, 12.439%, 11.209% and 10.798% provide a policy-neutral estimate based on the allocation method reflected in the Council’s June calculations. 

Under the scenarios considered here – the already-adopted 5% rates or a revised cap of 1% or 0% – the ultimate rates could fall approximately within these broader ranges: 

Tax class	Range under scenarios analyzed
Class 1	19.910% to 20.909%
Class 2	12.385% to 12.512%
Class 3	10.721% to 11.530%
Class 4	10.658% to 10.900%

 

These ranges would not necessarily apply if the Council selected a different cap between 1% and 5%, or adopted an unexpected allocation among the classes. 

Expected Timing of Any Final Rates 

Based on last year’s timing, I expect that, if the Governor signs A.11234/S.10273 and the Council intends to use a lower cap, the State and City will attempt to complete the process in October in time for DOF to use the final rates on the tax bills issued around mid-November 2026 for the installment due January 1, 2027. 

That is an expectation, not a statutory deadline or guarantee. The pending bill would give the Council until December 1, 2026, and expressly contemplates the possibility of amended bills if the ordinary bills have already been sent. Any revised rates would apply to Fiscal Year 2027, which began July 1, 2026. 

Suggested Rates for Fiscal Year 2027 Budgeting 

Property owners, purchasers, lenders, managing agents and boards may need to prepare budgets before the final Fiscal Year 2027 rates are known. Based on the presently adopted rates and the alternative Class Shares Cap scenarios analyzed above, the following rates may be used as practical, conservative interim budgeting assumptions stated to one decimal place: 

Tax class	Suggested budgeting rate
Class 1	20.9%
Class 2	12.5%
Class 3	11.5%
Class 4	10.9%

 

These suggested rates generally reflect the upper end of the modeled results, expressed to the nearest tenth of a percentage point. They are intended as practical assumptions for preliminary budgets, acquisition underwriting, loan escrows and operating projections while the final rates remain uncertain. 

Estimated annual regular property tax = billable taxable assessed value x suggested budgeting rate 

For example, a Class 4 property with $10 million of billable taxable assessed value would produce a preliminary regular-property-tax estimate of: 

$10,000,000 x 10.9% = $1,090,000 

These are planning assumptions only and are not a guarantee of the final adopted rates or the amount that will appear on any particular property’s tax bill. The calculation should use the property’s billable taxable assessed value – not its market value – and may need to be adjusted for exemptions, abatements, credits, prior-period charges and other property-specific items. 

The Pied-a-Terre Surcharge Is Separate 

The rates discussed in this article apply only to New York City’s regular real property tax. They are separate from the new pied-a-terre tax, formally known as the High-Value Secondary Home Property Surcharge. 

A property subject to the surcharge may owe both ordinary property tax calculated using the applicable Class 1 or Class 2 rate and the property’s taxable assessed value, and a separate pied-a-terre surcharge calculated under the surcharge law’s own valuation thresholds, rates, residency rules and allocation provisions. 

The regular Class 1 and Class 2 rates should not be used to calculate the pied-a-terre surcharge, and the pied-a-terre surcharge rates should not be used to calculate ordinary property tax. 

Rosenberg & Estis will continue monitoring the pending State legislation and any subsequent City Council action. Until final rates are adopted, property owners should treat the June 30 rates as provisional and use an appropriately prudent assumption for budgeting, acquisition underwriting, loan escrows and operating projections.