What Are Property Transfer Taxes and Mansion Taxes You Have to Pay When Buying a Condo in New York City

Two separate transfer taxes apply to almost every condo sale in New York City: one levied by the city itself and one by New York State. Both are calculated as a percentage of the purchase price, both are typically paid at closing, and both are legally the seller's obligation in a standard resale transaction. That said, in new-development sales, developers routinely pass these costs to the buyer through the contract, so you need to read your purchase agreement carefully.

How the NYC Transfer Tax Works

The New York City Real Property Transfer Tax, commonly called the RPTT, applies to the transfer of any real property in the five boroughs. For residential properties including condos, the rate is 1% of the purchase price when the price is $500,000 or less. Once the price crosses $500,000, the rate jumps to 1.425% on the entire amount, not just the portion above the threshold. On a $750,000 condo in Midtown or a two-bedroom in the West Village, that works out to $10,688 in city transfer tax alone.

The $500,000 threshold matters enormously in a city where the median Manhattan condo price has been running well above $1 million through most of 2026. Even in outer-borough markets like Astoria, Greenpoint, or Cobble Hill, condos priced above $500,000 are common, so the higher 1.425% rate applies to a large share of transactions across all five boroughs.

How the New York State Transfer Tax Works

On top of the city tax, New York State imposes its own Real Estate Transfer Tax, often abbreviated as RETT. The base state rate is 0.4% of the purchase price (that is $4 per $500 of consideration, in the language of the statute). For residential properties priced at $3 million or more, an additional state surcharge of 0.25% applies, bringing the combined state rate to 0.65% on those high-value transactions.

Like the city RPTT, the state RETT is technically the seller's tax in a resale. In new-development contracts for condos at buildings like those along Billionaires' Row or in Hudson Yards, however, buyers often absorb both the city and state transfer taxes as a condition of purchase. This is disclosed in the offering plan, and it is one of the reasons new-development closing costs in New York City can run significantly higher than resale closing costs.

Who Actually Pays These Taxes on a Condo Purchase

In a standard resale, the seller pays both the NYC RPTT and the New York State RETT at closing. In a new-development purchase, the offering plan almost always shifts both taxes to the buyer. This is a negotiating point in some slower markets, but developers at sought-after buildings rarely budge on it. If you are buying directly from a sponsor, budget for these taxes as your own expense from the start.

2. The Mansion Tax: What It Is, What It Costs, and When It Applies

The mansion tax is a New York State buyer-paid tax that applies to any residential purchase at $1 million or more. Unlike the transfer taxes above, there is no question about who pays it: the buyer always pays the mansion tax. It was originally a flat 1% on all purchases at or above $1 million, but a 2019 budget revision created a graduated rate structure with nine tiers that can push the effective rate to 3.9% on the highest-priced transactions.

The Graduated Mansion Tax Rate Table

The rates below apply to the full purchase price once the property crosses each threshold. They are not marginal rates. If you buy a condo at $1,050,000, the entire $1,050,000 is taxed at 1.25%, not just the $50,000 above the $1 million floor. That distinction creates pronounced pricing cliffs at each tier boundary.

• $1,000,000 to $1,999,999: 1% of the full purchase price. On a $1.5 million condo in Tribeca or the Upper East Side, that is $15,000.
• $2,000,000 to $2,999,999: 1.25%. On a $2.5 million two-bedroom in SoHo, that is $31,250.
• $3,000,000 to $4,999,999: 1.5%. On a $4 million condo, that is $60,000.
• $5,000,000 to $9,999,999: 2.25%. On a $7 million penthouse, that is $157,500.
• $10,000,000 to $14,999,999: 3.25%. On a $12 million full-floor unit, that is $390,000.
• $15,000,000 to $19,999,999: 3.5%.
• $20,000,000 to $24,999,999: 3.75%.
• $25,000,000 and above: 3.9%. On a $30 million penthouse at a tower overlooking Central Park, that is $1,170,000 in mansion tax alone.

The tax applies to any residential property in New York State, not just Manhattan. A condo in Long Island City, a townhouse in Brooklyn Heights, or a unit in a new development in Williamsburg all trigger the mansion tax if the price clears $1 million. Given where prices have settled across the city in 2026, a large share of condo transactions in the outer boroughs now fall into mansion tax territory.

How the Mansion Tax Changed the NYC Market

When the graduated mansion tax structure took effect in 2019, it had an immediate and measurable impact on pricing behavior. According to reporting from HousingWire, Manhattan home prices showed significant pressure near each tier boundary as sellers and buyers negotiated around the thresholds. Properties listed just above a tier cutoff often sat longer, while those priced just below moved faster. This dynamic continues to influence how sellers price condos in the $1 million to $2 million range today.

3. The Mortgage Recording Tax: One More Number to Know

If you are financing your condo purchase, New York City and State also impose a Mortgage Recording Tax on the loan amount. This is separate from the transfer taxes and the mansion tax, and it applies only when a mortgage is recorded against the property. All-cash buyers skip this one entirely.

The Mortgage Recording Tax on Condo Loans

The combined city and state Mortgage Recording Tax rate for residential loans in New York City is 1.8% on mortgages under $500,000 and 1.925% on mortgages of $500,000 or more. The lender absorbs 0.25% of the rate, so the buyer's effective out-of-pocket portion is 1.55% on smaller loans and 1.675% on larger ones. On a $900,000 mortgage used to finance a $1.1 million condo, the buyer's share of the Mortgage Recording Tax comes to roughly $15,075.

Why Condos Are Treated Differently Than Co-ops

Co-op buyers do not pay the Mortgage Recording Tax, and this is one of the most significant financial distinctions between buying a condo and buying a co-op in New York City. When you buy a co-op, you are purchasing shares in a corporation, not real property. Because no deed is recorded and no mortgage is placed on real property, the Mortgage Recording Tax does not apply. Condo buyers, by contrast, take title to real property and record a mortgage, triggering the tax. Over the life of a purchase, this difference can amount to tens of thousands of dollars in favor of co-op buyers.

Co-op buyers do face their own set of closing costs and board approval requirements, so the comparison is not straightforward. If you are weighing a co-op against a condo in a neighborhood like the Upper West Side or Sutton Place, understanding all the tax implications on both sides is essential before you make an offer.

4. How to Calculate Your Total Transfer-Related Tax Bill on a NYC Condo

Adding up all the taxes requires knowing three things: the purchase price, the loan amount, and whether you are buying from a sponsor or a private seller. The examples below assume a financed resale purchase where the buyer is responsible only for the mansion tax and the Mortgage Recording Tax, and the seller covers the transfer taxes.

A Worked Example at Three Price Points

• $850,000 condo in Astoria (resale, 20% down, $680,000 mortgage): No mansion tax (below $1 million). Mortgage Recording Tax at buyer's share of 1.675% on $680,000 equals approximately $11,390. Total buyer transfer-related tax cost: roughly $11,390.
• $1,400,000 condo in the West Village (resale, 25% down, $1,050,000 mortgage): Mansion tax at 1% equals $14,000. Mortgage Recording Tax at buyer's share of 1.675% on $1,050,000 equals approximately $17,588. Total buyer transfer-related tax cost: roughly $31,588.
• $3,500,000 condo in Tribeca (new development, buyer pays all transfer taxes, 20% down, $2,800,000 mortgage): NYC RPTT at 1.425% equals $49,875. NY State RETT at 0.65% (including the $3 million-plus surcharge) equals $22,750. Mansion tax at 1.5% equals $52,500. Mortgage Recording Tax at buyer's share of 1.675% on $2,800,000 equals approximately $46,900. Total buyer transfer-related tax cost: roughly $172,025.

The new-development example illustrates why sponsor purchases carry dramatically higher closing costs than resales at the same price. A buyer purchasing a $3.5 million condo from a private seller in a resale transaction would owe only the mansion tax and Mortgage Recording Tax, saving nearly $72,000 compared to buying the same-priced unit directly from a developer.

Timing and Payment at Closing

All of these taxes are paid at the closing table, not in advance. Your attorney will prepare a closing statement itemizing each tax alongside other costs like title insurance, attorney fees, and any building-specific charges. The mansion tax and Mortgage Recording Tax are wired or submitted by certified check on closing day. Neither is deductible on your federal income tax return as of current tax law, though you should confirm the current treatment with a tax advisor before closing.

5. Strategies Buyers Use to Manage These Costs

You cannot avoid these taxes, but you can plan around them intelligently. Several approaches are worth discussing with your attorney and your real estate agent before you make an offer.

Negotiating Who Pays the Transfer Tax

In a resale, the transfer taxes are the seller's obligation by default, but everything in a real estate contract is negotiable. In a buyer's market or when a seller needs to move quickly, a buyer's agent can sometimes negotiate a seller concession that effectively offsets the buyer's mansion tax or Mortgage Recording Tax burden. This is not common in competitive Manhattan submarkets, but it does happen in slower segments of the Brooklyn and Queens condo market.

New Developments and Transfer Tax Deals

Some developers, particularly those with slower-moving inventory, have offered to cover the mansion tax or transfer taxes as a buyer incentive. This is more common in buildings that launched at peak pricing and have had to recalibrate. If you are shopping new developments in neighborhoods like the Financial District, Two Bridges, or Long Island City, it is worth asking whether the sponsor is offering any closing cost credits. The answer will be in the offering plan amendments, and your attorney can review them.

The Pied-a-Terre Tax Proposal You Should Know About

A separate proposal that has circulated in Albany for several years would impose an additional annual tax on high-value properties used as secondary or part-time residences in New York City. As of September 2026, no pied-a-terre tax has been enacted into law, but the conversation has not gone away. Earlier in 2026, industry observers noted renewed discussion around the proposal as New York City weighed new revenue options. If you are buying a pied-a-terre condo in Manhattan, it is worth monitoring this issue with your attorney, because an enacted version of the tax could add a meaningful annual cost to ownership.

Understanding the full picture of property transfer taxes and mansion taxes is one of the most important parts of budgeting for a condo purchase in New York City. If you are also thinking about what the selling side of a transaction looks like, the article on selling a home in New York: pricing, timeline and what to expect covers how transfer taxes factor into net proceeds for sellers. And if you are looking for guidance on how to find the right buyer's agent to help you navigate all of this, the guide on which real estate agents in New York have the best reviews for helping buyers is a useful starting point.