Manhattan (part of New York City), home to Manhattan and 1694k New Yorkers, operates within New York City's unified Class 1/2/3/4 property tax system. NYC Class 1 (1-3 family residential) effective rates are kept low by AV growth caps — the AV target ratio of ~6% of market value combined with 6%/yr and 20%/5yr growth limits produces effective rates of 0.75-1.10%, among the lowest urban rates in the United States.
How the bill is built
NYC Class 1 calculation has three steps. Step 1: Market Value. The NYC Department of Finance estimates market value annually using comparable sales data. Step 2: Assessed Value (AV). AV is targeted at 6% of market value for Class 1 — but annual AV growth is capped at 6%/year and 20%/five years. This produces stated AV that systematically lags fast-appreciating neighborhoods. Step 3: Tax. Tax = AV × Class 1 nominal rate (~20.085% for FY 2025) − STAR exemption. The combination produces effective rates of approximately 0.92% — what we display as the headline rate.
2026 Manhattan (NYC borough) rate breakdown (pre-calibrated effective rate as % of market value, Manhattan district)
| Taxing entity | Rate |
|---|---|
| NYC Class 1 effective rate (after AV ratio + STAR) | 0.9200 |
| Combined total | 0.9200 |
As of April 26, 2026 · From NYC Department of Finance.
STAR, exemptions, and senior programs for 2026
New York's homeowner tax relief works through layered school-tax exemptions plus a comprehensive senior program structure plus the Alternative Veterans Exemption.
Basic STAR (School Tax Relief)
Basic STAR provides a school-tax-only exemption for owner-occupied 1-3 family homes (and condos/coops). Income limit is $250,000 (combined household, prior year). For homes purchased after Aug 2015, STAR is delivered as a credit check rather than an upfront exemption — homeowners file with the NYS Department of Taxation and Finance via Form RP-425 and receive a check each fall. Typical Basic STAR savings range from $1,400-$2,500/year depending on school district.
Enhanced STAR (65+)
Enhanced STAR provides a substantially larger school-tax exemption for senior homeowners. Eligibility: 65+ in primary residence, with 2024 income under $110,750 (limit increased for 2026). Enhanced STAR replaces (rather than layers on top of) Basic STAR, providing typically $2,200-$4,000/year in school-tax savings. Senior homeowners must also enroll in the Income Verification Program for automatic annual verification. File Form RP-425-IVP with municipal assessor.
Senior Citizens Homeowner Exemption (SCHE)
SCHE provides additional AV reduction (up to 50%) for income-qualified senior homeowners — sliding scale set by local jurisdiction. Income limits are typically $32,000-$58,400 for the maximum 50% reduction, scaling down to 5% at higher incomes. SCHE layers on top of Enhanced STAR and can produce combined savings of $3,000-$5,000+/year for income-qualified Long Island or Westchester seniors. File Form RP-467 with municipal assessor.
Alternative Veterans Exemption
The Alternative Veterans Exemption provides AV reduction for honorably-discharged veterans:
- Basic veteran: 15% AV reduction (max $54,000 AV)
- Combat-zone veteran: 25% AV reduction (max $90,000 AV)
- Disabled veteran: additional reduction equal to disability rating × $40,000 (max $180,000 AV)
For 100% disabled combat-zone veterans, total AV reduction can reach $270,000 — substantial, but never reaches full exemption. School district opt-in is required (~80% of NY school districts participate). File Form RP-458-a with municipal assessor.
Appealing your assessment
NY's appeal process is called grievance, with a Grievance Day held annually in each town/city (typically the 4th Tuesday of May, but varies). Homeowners file Form RP-524 with the local Board of Assessment Review, providing comparable sales evidence (preferably within the prior 12 months). The Board decides cases within ~30 days; further appeal to Small Claims Assessment Review (SCAR) is available for owner-occupied 1-3 family homes. Appeal volume in NY is exceptionally high — Nassau County alone processes 200,000+ appeals annually, and Westchester / Suffolk see similarly high volumes.