What is the real estate tax in New York and how is it calculated based on my home?

Property taxes on land and buildings are primarily levied by local governments in all fifty states and the District of Columbia. These taxes typically finance services like the police and fire departments as well as fund schools and pay for road maintenance along with other civic and social services. The same is true of personal property tax proceeds in the 27 states that have them.

In New York is one of 23 states and the District of Columbia which doesn’t have personal property taxes but does have them for real estate. As they are levied by county and municipal governments, they vary across the state but on average are 1.62 percent according to SmartAsset.

What is the real estate tax in New York and how is it calculated based on my home?

Real property taxes are based on the assessed value of real property including houses, buildings commercial and residential as well as land whether developed or vacant. “Every parcel of real property in an assessing unit, no matter how big or how small, is assessed,” according to the state’s Department of Taxation and Finance.

Your property tax bill is calculated based on your property’s taxable assessment and local tax rates. Local governments divide the total amount of money that must be raised from the property tax, or ‘tax levy’, by the taxable assessed value of real property in the municipality.

New York state law, with the exception of Nassau County and New York City, requires that all real property in each municipality must be assessed at a uniform percentage. The assessment is based on market value as determined by the local assessor’s office.

The market value is how much a property would sell for under normal conditions. This can be determined by looking at what properties of similar characteristics have sold for in the municipality. The assessor may estimate the value of a structure on the property based on the cost of materials and labor to replace it and then subtract depreciation. An estimate of a commercial property’s value may be determined on its potential to produce rental income for its owners.

Every year the amount of property tax that must be paid changes as properties are reassessed annually. For that reason, property owners are advised to check the tentative assessment every year to ensure that their assessment is fair. As well to check that they are receiving any exemptions that they may qualify for and expect to receive. The tentative assessment roll in most municipalities is filed on 1 May but you should check with your local assessor for the specific date.