Daniel Dimitrov — CC BY-SA 4.0 · Wikimedia Commons
There is a moment at almost every New York closing when a buyer looks at the settlement sheet and asks the same question: what is all this, and why is it so much? Beyond the price of the home itself, a cluster of one-time taxes lands on the table — some on the seller, one famously on the buyer. They are not optional, they are not negotiable away in most cases, and they can add up to a five- or six-figure line item. The good news is that they are entirely knowable in advance. Once you understand the three taxes below and who pays each, nothing on your closing statement should be a surprise.
This article reflects rules as of June 2026.
The three taxes, at a glance
A typical New York City home sale touches three separate transfer-type taxes:
- New York State Real Estate Transfer Tax — paid by the seller.
- New York City Real Property Transfer Tax (RPTT) — paid by the seller.
- The "mansion tax" (technically the state's additional tax plus, inside the five boroughs, a supplemental tax) — paid by the buyer, only when the price is $1 million or more.
The first two are the seller's cost of doing business. The third is the one that catches buyers off guard, because it is a buyer expense that scales sharply with price.
New York State transfer tax (seller pays)
New York State imposes a base transfer tax of $2 for each $500 of the price (or any fraction of $500) — effectively 0.4% of the purchase price. This applies to real estate statewide, New York City included. On a $1,000,000 sale that is $4,000.
By statute the grantor (seller) is responsible for this base tax. If the seller fails to pay, the obligation can fall back on the buyer, which is one reason title companies and attorneys collect it at closing rather than trusting anyone to remit it later.
New York City Real Property Transfer Tax (seller pays)
On top of the state tax, the City levies its own Real Property Transfer Tax (RPTT), collected by the NYC Department of Finance. For residential property the rate is:
- 1.0% of the price when the price is $500,000 or less, and
- 1.425% of the price when the price is more than $500,000.
For commercial property and certain other transfers, the City's rates are higher (1.425% at or below $500,000 and 2.625% above). Like the state tax, the RPTT is a seller obligation. Note the "cliff" at $500,000: the higher rate applies to the entire price, not just the portion above the threshold — so a deal at $500,001 is taxed at 1.425% on the whole amount.
The mansion tax (buyer pays)
This is the one buyers need to internalize. There is no single "mansion tax" rate; there are two layers that stack.
Layer one — the statewide additional tax. New York imposes an additional tax of 1% of the price on residential property sold for $1 million or more. This is the original "mansion tax," it applies across the state, and it is the grantee's (buyer's) responsibility.
Layer two — the NYC supplemental tax. Inside New York City, a supplemental tax stacks on top for residential sales of $2 million or more, on a progressive schedule. Combine the 1% base with the NYC supplemental and the effective buyer-paid mansion tax in the five boroughs runs as follows:
| Purchase price | Mansion tax (buyer) |
|---|---|
| $1,000,000 – under $2,000,000 | 1.00% |
| $2,000,000 – under $3,000,000 | 1.25% |
| $3,000,000 – under $5,000,000 | 1.50% |
| $5,000,000 – under $10,000,000 | 2.25% |
| $10,000,000 – under $15,000,000 | 3.25% |
| $15,000,000 – under $20,000,000 | 3.50% |
| $20,000,000 – under $25,000,000 | 3.75% |
| $25,000,000 and above | 3.90% |
Two features matter. First, the rate applies to the full purchase price, not just the slice above each threshold — the brackets are "all-or-nothing." Second, that creates a cliff at every line: buying at $2,000,001 instead of $1,999,999 lifts the rate from 1.00% to 1.25% on the entire price, a jump of roughly $5,000 for one extra dollar of price. This is exactly why experienced buyers and their attorneys watch the round-number thresholds so carefully.
Outside New York City, only the statewide 1% layer applies above $1M (some other localities have their own local levies — always confirm for the specific county).
A worked example
Imagine a buyer purchasing a $1,500,000 condominium in Manhattan.
Buyer pays:
- Mansion tax: 1.0% of $1,500,000 = $15,000. (No NYC supplemental tax applies, because the price is under $2,000,000.)
Seller pays:
- NYS transfer tax: 0.4% of $1,500,000 = $6,000
- NYC RPTT: 1.425% (price over $500,000) of $1,500,000 = $21,375
- Seller transfer-tax subtotal: $27,375
Now push the same condo to $2,500,000 and the buyer's side changes sharply:
- Mansion tax: 1.25% of $2,500,000 (1% base + 0.25% NYC supplemental) = $31,250
The seller at $2.5M would owe NYS transfer tax of $10,000 plus NYC RPTT of $35,625. (An extra City "additional base tax" of $1.25 per $500 kicks in for residential sales of $3 million or more — not triggered here, but worth knowing as prices climb.)
A few practical notes
- New construction is different. In many new-development contracts, sponsors ask the buyer to pay the seller's transfer taxes too. That is a negotiable contract term, not a tax rule — read the offering plan and have your attorney flag it. Browse current new developments with this in mind.
- Budget for it as cash. Mansion tax and transfer taxes are generally paid at closing and are not financeable into a typical mortgage, so they come out of your cash-to-close.
- The thresholds are about price, not the property type's name. A modest two-bedroom can owe "mansion tax" — the label is historical, not a judgment about the home.
- Rules and proposals change. There has been recurring discussion in Albany about adjusting these taxes; as of this writing the brackets above are the law, but always verify before you sign.
When you are weighing a specific apartment or house, the cleanest path is to model the full closing math up front. Our team is happy to walk you through the numbers on any property — contact our team or browse current listings to start.
Disclaimer
This article is general educational information, not legal, tax, immigration, or financial advice. Tax rules change and individual situations vary. Always confirm current rates and your specific obligations with the official sources below and with a licensed attorney or tax professional before relying on any figure here.
Sources
- New York State Department of Taxation and Finance — Real estate transfer tax: https://www.tax.ny.gov/bus/transfer/rptidx.htm
- NYS Department of Taxation and Finance — Instructions for Form TP-584-NYC (TP-584-NYC-I, rev. 8/25): https://www.tax.ny.gov/pdf/current_forms/property/tp584nyci.pdf
- NYC Department of Finance — Real Property Transfer Tax (RPTT): https://www.nyc.gov/site/finance/property/property-real-property-transfer-tax-rptt.page
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