The proposed 9.5 percent across-the-board increase is off the table for now. The bigger question for condo buyers is what happens if New York changes the way homes are valued for tax purposes.
Two separate things have been happening with New York City property taxes, and buyers should not mix them up. One was a short-term budget fight. The other is a much bigger question about how the city values homes in the first place.
The budget fight came first. In February, the Mamdani administration presented a preliminary budget of roughly $127 billion for fiscal year 2027. One of the options included in that plan was a 9.5 percent increase in property taxes as a last-resort measure to help close the city's budget gap. That number understandably got attention. For someone looking at a $2 million or $4 million apartment, property taxes up 9.5 percent is not exactly the headline you want to see.
But the picture has changed since then. By the May Executive Budget, the proposed broad 9.5 percent property-tax increase had been removed. Buyers should not model their purchase today as though a 9.5 percent increase is scheduled to hit their tax bill. It isn't. That does not mean property taxes are a non-issue. In fact, the more important question for a long-term buyer may have very little to do with that headline. It is how New York decides what your apartment is worth for tax purposes.
The strange way NYC values condos
If you buy a condo for $3 million, you might reasonably assume the city starts with the fact that your apartment is worth roughly $3 million. That is not necessarily how it works. Under New York State law, the Department of Finance generally values condos and co-ops as though they were income-producing rental properties. The city looks at comparable rental buildings and their income and expenses to estimate a value for tax purposes.
That creates one of the stranger features of owning real estate in New York. The price someone is willing to pay for an apartment and the value the city uses in calculating its property taxes can be very different numbers. A luxury condo might trade for several million dollars while carrying a city market value and taxable assessed value that do not move neatly with that sale price. For buyers, that gap matters.
The reform question
New York has been debating property-tax reform for years. A major framework came from the city's Advisory Commission on Property Tax Reform, which recommended substantial changes to the system, including moving toward sales-based valuation for residential properties such as condos and co-ops. In plain English, that could mean the value used in the tax system becomes more closely connected to what comparable homes actually sell for rather than relying on the current rental-income methodology.
That sounds logical, but it could also redistribute who pays what. If you are buying a high-value condo whose current tax treatment benefits from the gap between its taxable valuation and what apartments in the building actually sell for, a future reform could change the economics of owning it. That does not mean New York is about to start taxing every condo based directly on its purchase price.
Any meaningful overhaul would require legislation, and the details would matter enormously. Tax rates could change. There could be exemptions, caps or protections for certain homeowners, and changes could be phased in over years. Nobody should tell you today exactly what your apartment's tax bill would be under a reform that has not been enacted. But ignoring the possibility entirely is not particularly smart either.
What this means when you're buying
Say you are comparing two apartments. Apartment A costs more but has unusually low property taxes. Apartment B has a similar purchase price but substantially higher taxes. At first glance, Apartment A looks like the obvious winner. Before treating those savings as permanent, figure out why the taxes are lower.
Does the building have a 421-a or another property-tax exemption? How many years remain? What happens when it expires? Is the unit's current assessed value unusually low relative to the apartment's actual market value? Those questions tell you much more than the tax number displayed on a listing.
A long tax exemption can still be extremely valuable. If you have ten or fifteen years of meaningful savings ahead of you, that is real money. But if you expect to own the apartment beyond the exemption period, you should understand what the building looks like without it. And if you are buying a very high-value condo with no exemption but a surprisingly low current tax bill, it is worth understanding how the property is being assessed rather than assuming today's number will simply continue indefinitely.
Don't buy the year-one number
This is the bigger principle. New-development marketing naturally focuses on what an apartment costs today: today's asking price, today's common charges, today's taxes, today's mortgage payment. But you are probably not buying it for today.
If you expect to own for seven, ten or fifteen years, the useful question is what the apartment is likely to cost you throughout that period. That means modeling an expiring tax exemption, understanding how common charges could change, and leaving some room for a property-tax system that may not look exactly like today's.
The 9.5 percent proposal made headlines because it was a simple number. For a condo buyer, the less dramatic question may ultimately matter more: what happens if New York changes the way it decides what your apartment is worth? That is the one worth watching.
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