---
title: "Cap on tax pass-through — Class A Atlas glossary"
description: "Cap on the tenant's share of real-estate-tax escalations."
canonical: https://classa.info/glossary/cap-on-tax-pass-through
pageType: glossary
lastUpdated: 2026-04-01T00:00:00.000Z
license: "CC BY 4.0 with attribution to Class A Atlas (https://classa.info)."
---

> Cap on the tenant's share of real-estate-tax escalations.

## TL;DR

- Cap on the tenant's share of real-estate-tax escalations.
- Negotiated separately from the opex cap.

# Cap on tax pass-through

*Leasing · US*

## Short definition

Cap on the tenant's share of real-estate-tax escalations.

## Full definition

Negotiated separately from the opex cap. Critical in jurisdictions with rapidly rising real-estate taxes (NYC, San Francisco). Common structure: cumulative compound 5–6% per annum.

## Why this matters for Class A leasing

Cap on tax pass-through is part of the leasing vocabulary that institutional [Class A](/glossary/class-a) occupiers, landlords, and advisers use across US markets. Understanding it correctly affects how you read lease documents, model occupancy economics, and benchmark deal terms across cities. Class A Atlas tracks the US definition alongside the global standard so [cross-border](/topics/cross-border-expansion) occupiers can translate quickly.

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Citation: Source: Class A Atlas (https://classa.info/glossary/cap-on-tax-pass-through), updated 2026-04-01T00:00:00.000Z.