DOF Publishes FY 2025 Tentative Assessment Roll

Class 2 rentals saw a market value increase of 5.7 percent.

 

 

On Jan. 16, the NYC Department of Finance (DOF) announced the publication of the tentative property assessment roll for fiscal year (FY) 2025, which shows the total market value of all NYC properties at about $1.491 trillion, an increase of 0.7 percent from the 2024 fiscal year. According to the DOF, the citywide taxable billable assessed value, the portion of market value to which tax rates are applied, increased by 4.2 percent to $298.9 billion.

Class 2 rentals saw a market value increase of 5.7 percent.

 

 

On Jan. 16, the NYC Department of Finance (DOF) announced the publication of the tentative property assessment roll for fiscal year (FY) 2025, which shows the total market value of all NYC properties at about $1.491 trillion, an increase of 0.7 percent from the 2024 fiscal year. According to the DOF, the citywide taxable billable assessed value, the portion of market value to which tax rates are applied, increased by 4.2 percent to $298.9 billion.

The property values for FY 2025 reflect real estate activity between Jan. 6, 2023, to Jan. 5, 2024, the taxable status date, as well as income and expense information on commercial properties during calendar year 2022 and submitted to DOF in 2023. Owners can access their tentative assessment through DOF’s Property Information Portal at www.nyc.gov/assets/finance/jump/digitaxmaps.html.

At this time, the DOF sends each owner a Notice of Property Value (NOPV) estimating their anticipated tax responsibility. The release of the tentative assessment roll marks the beginning of the time period in which property owners can examine and challenge their property values before the roll is finalized in May. The assessed values in the final roll, along with the tax rates and any exemptions or abatements, are used to calculate property taxes for the fiscal year that starts on July 1, 2024.

Values for Class 2 Properties

The total market value for Class 2 properties, which include rental apartment buildings, registered $370.4 billion, an increase of $18.8 billion, or 5.3 percent, from FY 2024. The total assessed value increased by 4.5 percent, to $116.1 billion. Brooklyn experienced the largest market value percent increase for Class 2, at 9.2 percent, and the largest taxable billable assessed value percent increase at 11.0 percent.

Class 2 rentals saw a market value increase of 5.7 percent. And the total assessed value increased by 5.3 percent for Class 2 rental apartments. Manhattan had the least market value increase at 4.3 percent and Staten Island had the largest taxable billable assessed value increase at 12.6 percent for rental apartments.

Values for Class 4 Properties

The total market value for Class 4 commercial properties increased by 4.4 percent citywide to $329.6 billion. Brooklyn had the largest percent increase in market value at 8.0 percent.

Permitted Valuation Approach

State law requires that the DOF value all Class 2 properties as if they produce income. To determine a building’s market value, the DOF uses statistical modeling to calculate the typical income and expenses for properties similar to yours in size, location, age, and number of units. The process varies depending upon whether a property has more or fewer than 10 units.

Most rental building owners are legally required to file an annual Real Property Income and Expense (RPIE) statement. To determine a rental property’s market value, DOF uses income and expense information to estimate its current net income. This estimate includes adjustments to the filed information based on our statistical models and assessment guidelines. DOF then applies a capitalization rate to the estimated net income to calculate a property’s market value. The capitalization rate is the expected rate of return based on the income generated by your property.

Smaller Class 2 buildings with 10 units or fewer are also valued as income-producing properties. However, since most of these buildings are not legally required to file a Real Property Income and Expense statement, the valuation approach is simplified by using the gross income multiplier method. The DOF estimates the typical income per square foot generated by comparable rental properties; generates a total income for the building by multiplying the income per square foot by the building’s total square footage; and multiplies the building’s estimated income by a factor to generate the property’s market value. For example, a building with income of $100,000 and subject to a multiplier of 10 would be valued at $1 million.

Challenging Assessed Values

The NYC real property tax assessment and appeal procedure is calendar driven. With the release of the tentative assessment roll, property owners will now have an opportunity to examine and challenge these values before the assessment roll is finalized in May. In June, the DOF will use the final roll to generate property tax bills for FY 2025.

Tax commission appeal. If you believe that the DOF set your assessed value too high, you have the right to appeal to the NYC Tax Commission, an independent city agency that has the authority to change your property’s assessment value and tax class, and review exemption determinations. You don’t need an attorney to file with the Tax Commission, and you aren’t required to attend an in-person hearing, though you may do so if you wish.

Between March and October, the NYC Tax Commission conducts hearings with property owners who have challenged their Tentative Assessments or their representatives to consider whether an assessment should be reduced. At such hearings, information and documentation supporting a property owner’s appeal may be presented. Hearing Officers typically render decisions within weeks of a hearing.

If the property owner accepts a NYC Tax Commission offer to reduce the assessment, the appeals process is concluded, the reduction is effective as of July 1, and the property owner may apply for a refund of any tax overpayment. If the NYC Tax Commission doesn’t extend an offer to reduce the assessment, or if an owner doesn’t accept the offer and believes that a greater reduction is warranted, the tax appeal for the current year may be continued by filing an Article 7 petition in New York Supreme Court on or before Oct. 24 within the tax year to which the assessment applies.

To file an appeal, visit the Tax Commission at www.nyc.gov/taxcommission. In the “Forms” tab, select the “General Instructions” link and review form TC 600, “How to Appeal a Tentative Assessment.” Printed forms are available at DOF business centers and at the Tax Commission’s office at 1 Centre Street, Room 2400, New York, NY 10007.

The deadline to submit an appeal for your Class 2 property is March 1. This means that the Tax Commission must receive your appeal by March 1, which means mailing your appeal on that date isn’t sufficient.

If you have a smaller Class 2 property (10 units or fewer), you must prove that your property’s value is less than its effective market value in order for the Tax Commission to lower your assessment. Your property’s effective market value is its assessed value, before exemptions, divided by 45 percent.

Request to update. If there is a factual error on your NOPV such as the wrong number of units or square footage, you can report it to the DOF by filing a “request to update” form, available at www.nyc.gov/finance. If you file your Request to Update form between Aug. 31 and mid-April of the following calendar year, and your changes are approved, you can expect to see the changes reflected in the final roll, published in June. DOF will send you a notification of the changes in a letter between January and June. If you file your request to update from mid-April to Aug. 31, and your changes are approved, you can expect to see the changes reflected on the tentative roll that’s published the following January.

Request to review. If you disagree with the estimated market value on your NOPV, you can file a “request to review” form available at www.nyc.gov/finance. You may disagree based on factors such as finances, comparable sales, building use/classification, physical development, or structure features.

It’s important to note that filing a Request for Review or to Update with the DOF isn’t a substitute for appealing your assessed value with the Tax Commission.