Buildings of one to three units are Class 1 and assessed at 6% of market value; four units and above are Class 2a and assessed at 45%. The fourth unit multiplies the assessment ratio by more than seven.
For a small investor the practical rule is blunt: buy a 3-family, not a 4-family, in New York City — the extra unit's rent rarely covers what the reclassification costs.
- Unit counts
- Up to 3 units
- Class1 assessment ratio
- 6% of market value (1–3 units)
- Class2a assessment ratio
- 45% of market value (4–10 units)