Tax Strategy & PlanningAugust 31, 2026· 8 min read
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Section 01
MRT’s Impact on First-Time Homebuyers
For first-time homebuyers, the Mortgage Recording Tax can significantly increase closing costs, making the overall expense of purchasing a home higher than anticipated. While first-time buyers may be familiar with other costs like down payments and inspections, MRT can be an unexpected financial burden.
Since MRT is typically calculated as a percentage of the loan amount, the cost will vary depending on the size of the mortgage. In NYC, for example, the MRT is 1.8% for mortgages under $500,000 and 1.925% for mortgages over that amount. This means that first-time buyers with larger loans will face a higher MRT expense.
Section 02
Why It’s Essential to Budget for MRT
Because the MRT must be paid upfront at closing and cannot be financed into the mortgage, it’s crucial for first-time buyers to include this in their overall budget. In addition to the down payment, closing costs, and other fees, MRT can add a significant amount to the financial commitment.
Not planning for MRT can lead to unexpected financial stress at the time of closing, which is why it’s important to factor this cost into the overall purchasing plan. First-time homebuyers should consult with their lender or real estate professional to understand how MRT will impact their closing costs and to ensure they have the necessary funds set aside.
Section 03
Conclusion
While there are no exemptions or discounts for first-time homebuyers in New York City when it comes to the Mortgage Recording Tax (MRT), understanding its impact on closing costs is essential. Planning ahead and budgeting for this expense will help first-time buyers manage the financial aspects of purchasing a home.
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