What's happening
The bill removes the cap on assessed value growth for class one properties under $3 million owned by households earning under $250,000.
Why it matters
Potential for Higher Property Taxes. By removing the cap on assessed value growth, homeowners who meet the criteria may see their property assessments (and thus taxes) increase more rapidly if market values rise, impacting household budgets and long-term financial planning.
Targeted Impact on Lower-Value Properties. The change specifically affects class one properties (typically one- to three-family homes) valued under $3 million and owned by households earning less than $250,000, meaning it could have a significant effect on middle- and lower-income homeowners, not just luxury or investment properties.
Greater Revenue Flexibility for Local Governments. Without the growth cap, municipalities may have increased property tax revenues from these properties, which could be used to fund local services or address budget gaps, but may also raise concerns about affordability and displacement.
Shift in Tax Equity and Neighborhood Dynamics. The amendment could alter the balance between protecting homeowners from sudden tax increases and ensuring tax assessments reflect real market values, potentially impacting neighborhood demographics, real estate markets, and debates over property tax fairness.
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Who cares
Headline styles
End Cap on Property Assessments
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to local government
- Referred to local government
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
414
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the real property tax law, in relation to eliminating the cap on assessed value growth for certain class one properties
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of subdivision 1 of section 1805 of the real property tax law, as amended by chapter 935 of the laws of 1984, is amended to read as follows:
The assessor of any special assessing unit shall not increase the assessment of any individual parcel with a market value, as determined by the assessor, under three million dollars which is classified in class one in any one year and where the owners of such property have a gross household income not exceeding two hundred fifty thousand dollars, as measured from the assessment on the previous year's assessment roll, by more than six percent and shall not increase such assessment by more than twenty percent in any five-year period. The first such five-year period shall be measured from the individual assessment appearing on the assessment roll completed in nineteen hundred eighty; provided that if such parcel would not have been subject to the provisions of this subdivision in nineteen hundred eighty had this subdivision then been in effect, the first such five-year period shall be measured from the first year after nineteen hundred eighty in which this subdivision applied to such parcel or would have applied to such parcel had this subdivision been in effect in such year.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to assessment rolls completed on and after such date. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01251-01-5
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to eliminating the cap on assessed value growth for certain class one properties
Purpose or general idea of bill
To eliminate the cap on assessed value growth for Class 1 properties in special assessing units with a market value of over three million dollars where the gross household income exceeds $250,000
Summary of provisions
Section 1 amends Section 1805 of the Real Property Tax Law to provide that the cap on assessed value growth for Class 1 properties should apply only to properties with a market value below three million dollars and with a gross household income of $250,000 or less.
Read the full memo (677 words)
Section 2 provides that the act shall take effect on the first of Janu- ary next succeeding the date on which it shall have become a law.
Justification
New York City sorts all real property within its boundaries into four categories for purposes of assessment and taxation: Class 1 is all resi- dential buildings with one, two, or three dwelling units, Class 2 is all residential buildings with four or more units, Class 3 is utility prop- erties like power plants and substations, and Class 4 is all other commercial and industrial buildings. Each of the classes must bear a specific percentage of the overall tax levy for the City, known as a "class share." The share for Class 1 properties has historically been around 15%, meaning that 15% of the overall taxes collected in a certain year will be paid by Class 1 homeowners. As the Regional Plan Associ- ation notes in its 2018 report "Residential Property Taxation in New York City," because of these predetermined percentages any reforms to the property tax system that do not affect the division of class shares, like exemption policies, assessment caps, or valuation methods, have the effect almost exclusively of shifting a tax burden within a class rather than between classes.
A shift within Class 1 of the tax burden in order to provide relief to low and middle-income homeowners is exactly what's needed. The cap on assessed value growth for all Class 1 properties, which limits increases on the assessed value to 6% a year or 20% over five years, was originally written to protect against spikes in home valuations that would lead to sudden and dramatic increases in property tax bills, but has long since outlived its purpose. It fails to reflect the tremendous appreciation of real estate in the City (between the years of 2000 and 2017 the value of real property more than tripled from $382 billion to $1.47 trillion) and results in homeowners in long-gentrified neighbor- hoods bearing a disproportionately small burden of the tax levy since a significant share of the market value of their homes escapes assessment. This puts their property tax bills on par with those of middle-class homeowners throughout the city who struggle to make ends meet and provide for their families in an increasingly expensive city.
This bill would correct this injustice by clarifying that the cap on assessed value growth should apply only to homes worth less than $3 million with a gross household income of $250,000 or less, ensuring that only households who are truly lower or middle-class will continue to receive the assessment cap. Households exceeding these property value and income thresholds will wind up paying property taxes that better reflect the true value of their homes, thus picking up a greater portion of the Class 1 tax share.
Prior legislative history
2024: S11 - Referred to Local Government
2023: S11 - Referred to Local Government
2022: S785 - Referred to Local Government
2021: S785 - Referred to Local Government
2020: S5324B - Referred to Local Government
2019: S5324B - Referred to Local Government
Fiscal implications
None to the state.
Effective date
This bill would take effect on the first of January next succeeding the date on which it shall have become a law and apply to all assessment rolls completed on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.