Understand the graduated Mansion Tax rates on NYC residential purchases above $1 million.
The New York State "Mansion Tax" is an additional transfer tax on residential real property purchases of $1 million or more. Despite the name, it applies to apartments, condos, co-ops, and houses, not just mansions. The tax is paid by the buyer.
Since 2019, the Mansion Tax uses graduated rates:
Purchase at $1,500,000:
Purchase at $5,000,000:
Purchase at $25,000,000:
The Mansion Tax rate applies to the entire purchase price, not just the amount above $1 million. This creates a "cliff effect" where a purchase at $999,999 pays no Mansion Tax but a purchase at $1,000,000 pays $10,000. For this reason, many transactions are structured just below the threshold.
For co-op purchases, the Mansion Tax is calculated on the total consideration, which includes the purchase price of shares plus the buyer pro-rata share of the underlying mortgage. This can push a nominally sub-$1M purchase above the threshold.
The Mansion Tax is a NYS transfer tax paid by buyers of residential property costing $1 million or more. Rates are graduated from 1.0% to 3.9% depending on the purchase price.
The buyer pays the Mansion Tax. It is due at closing and cannot be financed into the mortgage. It is in addition to the standard NYS and NYC transfer taxes, which are typically paid by the seller.
RegWatch provides the actual property data you need for these calculations: assessed values, tax rates, zoning, FAR, and more.
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