NYC real estate taxes are typically 30-40% of operating expenses for Manhattan Class A office and 20-30% for multifamily. The NYC Department of Finance assessment process produces formulaic property values that often overshoot market — particularly during cap rate compression cycles or when underwriting assumptions are stale. Tax certiorari (the appeals process) reclaims overcharged taxes; successful appeals typically reduce assessments 5-25%.
The Assessment Cycle
NYC Department of Finance values properties annually. The notice of property value (NOPV) is mailed in January, with appeal deadlines in March. The assessor sets a transitional value (gradually phasing the actual assessed value) and a final assessed value. Real estate taxes for the fiscal year (July 1 - June 30) are calculated as (assessed value × applicable tax rate) — the tax rate currently sits around 12.3% for Class 2 (commercial) and 19.6% for Class 4 (large multifamily and commercial).
The Appeal Process
Tax certiorari runs through the NYC Tax Commission (administrative appeal) and, if unsuccessful, NYS Supreme Court (judicial appeal). The administrative appeal must be filed by March; if denied, the judicial appeal is filed by October. Both processes can take 1-3 years to resolve — but successful appeals reach back to the original tax year. Most NYC commercial owners file every year as a discipline.
Supporting Evidence
Strong appeals require evidence that the assessed value exceeds market value. Standard supporting documents: trailing-12 NOI statement (verified against bank statements), recent comparable sales analysis, recent comparable rental data, building condition survey, and (for cap rate appeals) yield curve analysis showing peer cap rates. Specialty cases (rent-stabilized portfolios, ground-leased properties, mid-conversion assets) require expert testimony.
Specialist Attorneys
NYC tax certiorari is a specialty practice — Marcus & Pollack, Pottish Freyberg, Tuchman Korngold, and a handful of others dominate. Specialist counsel typically takes 25-33% of the tax savings on contingent fee, with no recovery if the appeal fails. For NYC commercial real estate owners, this is asymmetric upside — the counsel only gets paid if they save you money. Skyline maintains relationships with active tax certiorari firms and provides introductions on every NYC commercial real estate engagement.
- File tax certiorari every year as a discipline — even modest reductions compound.
- Track the NOPV mailing dates and don't miss the March deadline.
- For larger portfolios, engage portfolio-wide certiorari counsel rather than one-off.
- Skyline introduces NYC commercial owners to active tax certiorari firms.
Robert Khodadadian and Skyline Properties advise NYC commercial owners on operating strategy including property tax certiorari. The firm has closed $976M+ in NYC commercial real estate and works with active certiorari counsel. Email info@skylineprp.com for confidential tax advisory introductions.