The city’s tax on the sale
The NYC real property transfer tax (RPTT) is the city's tax on the sale itself: 1% of the price on most residential deals up to $500,000, 1.425% above that, and the seller usually pays it.
In briefFour taxes, one closing
The mortgage enters twice
The mortgage enters the picture twice: assumed mortgage debt counts toward the price the RPTT is computed on, and the loan itself triggers a separate mortgage recording tax paid by the buyer.
Four tax lines at closing
Add the state's transfer tax and the buyer's mansion tax, and a single closing can carry four tax lines. Each one is predictable if it is priced in early.
One conversation before contract signing beats three after the closing statement arrives.
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The setup
Not one tax on the sale — four
Most people treat the transfer tax as one line, computed on the sale price. In New York City it is usually more than one tax, and not always based on the cash price. The city, the state, and the buyer's lender each charge their own tax on the same closing, and if the buyer takes on the seller's mortgage, that debt adds to the amount the city taxes. Four taxes, four sets of rules, and the mortgage feeds into two of them.
01What the RPTT is
What the RPTT is and who pays it
The RPTT applies to transfers of New York City real property, and to transfers of co-op shares, which the city treats as an economic interest in the building. The seller is the taxpayer on almost every resale. The main exception runs the other way in new developments, where sponsors customarily push the tax to the buyer in the contract, and it applies whenever the seller is exempt, such as a government entity. The return, Form NYC-RPT, is due with the transfer, and late filings draw penalty and interest of their own.
| Property type | Price up to $500,000 | Price above $500,000 |
|---|---|---|
| 1–3 family home, condo, co-op | 1.0% | 1.425% |
| Commercial / 4+ family | 1.425% | 2.625% |
02How debt counts
How mortgage debt counts toward the RPTT base
The tax is computed on consideration, and consideration is broader than the cash that changes hands. If the buyer assumes the seller's mortgage, or takes the property subject to it, that debt counts toward the price being taxed. On a co-op sale, the apartment's allocated share of the building's underlying mortgage joins the calculation the same way.
This is the trap inside the phrase “the mortgage is part of the deal.” A transfer that looks modest in cash terms can carry a much larger tax base once debt is counted, and sellers who priced the RPTT off the cash figure find out at the closing table.
03The state layer
The state’s layer: transfer tax and the mansion tax
New York State adds its own transfer tax of $2 for every $500 of consideration, which works out to 0.4%, paid by the seller with the buyer on the hook if the seller does not pay. On residential purchases of $1 million or more, the buyer separately owes the mansion tax.
Mansion tax tiers
| Purchase price | Mansion tax rate |
|---|---|
| $1,000,000 – $1,999,999 | 1.00% |
| $2,000,000 – $2,999,999 | 1.25% |
| $3,000,000 – $4,999,999 | 1.50% |
| $5,000,000 – $9,999,999 | 2.25% |
| $10,000,000 – $14,999,999 | 3.25% |
| $15,000,000 – $19,999,999 | 3.50% |
| $20,000,000 – $24,999,999 | 3.75% |
| $25,000,000 and up | 3.90% |
04One closing, four taxes
Who pays what at an NYC closing
A single sale can carry four separate transfer taxes, split between the two sides under four different rules.
Seller pays
Real property transfer tax (RPTT)
The city's tax on the sale. Assumed mortgage debt counts toward the price it is figured on.
1% to 1.425% residentialNYS transfer tax
The state's layer, $2 per $500 of consideration. Buyer is on the hook if the seller does not pay.
0.4%Buyer pays
Mansion tax
On residential purchases of $1 million or more, rising by tier. Each threshold reprices the whole amount.
1% to 3.9%Mortgage recording tax
On the loan itself, figured on the amount borrowed. Co-op loans are exempt.
~1.8% to 1.925%The seller’s taxes attach to the sale; the buyer’s mortgage recording tax attaches to the loan. The mortgage shows up twice: assumed debt enlarges the RPTT base, and the new loan triggers its own tax.
05Recording tax
The mortgage recording tax, the other closing-table tax
New York separately taxes the recording of a mortgage itself, computed on the amount borrowed. In the city, the combined state and local bill on a residential loan typically works out to 1.8% of the loan below $500,000 and 1.925% at or above it, after the lender picks up its required 0.25% share. Finance a $960,000 purchase loan and the recording tax alone approaches $18,500.
Co-op buyers skip this one entirely. A co-op loan is secured by shares, not by recorded real property, which is one reason co-op closing costs run lighter than condo closing costs at the same price.
06CEMA
CEMA: paying mortgage tax only on new money
A CEMA (consolidation, extension, and modification agreement) lets the buyer pay mortgage recording tax only on new money borrowed above the old balance. New York practice developed it because the tax falls on newly recorded debt. In a refinance, the old lender assigns the existing mortgage to the new one, and tax is paid only on the increase. In a purchase CEMA, the seller's unpaid mortgage is assigned into the buyer's financing, and the parties split the savings, with the seller often gaining a matching reduction on the state transfer tax side.
The catch is cooperation and cost: no lender is required to assign a mortgage, both banks charge fees, and the paperwork takes weeks. The arithmetic works when the assigned balance is large. Someone should run it before the attorneys start drafting.
07A worked example
A worked example: tax on a $1.2M condo sale
| Tax line | Rate | Who pays | Amount |
|---|---|---|---|
| RPTT | 1.425% | Seller | $17,100 |
| NYS transfer tax | 0.4% | Seller | $4,800 |
| Mansion tax | 1% | Buyer | $12,000 |
| Mortgage recording tax | ~1.925% | Buyer | $18,480 |
| Total | $52,380 |
Transfer-type taxes you pay to acquire property are added to your basis, so they reduce the capital gain when you eventually sell. That only works if someone records them now. Closing statements have a way of vanishing by the time the sale happens a decade later.
08Where a CPA fits
Where a CPA fits in your closing
Attorneys close the deal. We price it, and we keep the paper that saves you tax later.
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On timing, and on the closing table
“Make sure to reach out as soon as you have the question. Don’t wait until the questions pile up. Get all your questions answered right away.”
George Dimov, CPA
“We sold a property with very high capital gains... We needed solid advice on how to end the year in a manner that would legally limit the tax ramifications. George and his team were very organized, thorough and required much less of my time and effort than I expected. A very professional experience.”
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09A note on basis
Keep the closing statement — for a decade
In the costliest cases, an owner sells years after buying, and nobody can document the closing taxes that belonged in basis, so the gain is overstated and overtaxed. The fix costs nothing at purchase. It is a folder, kept by someone whose job is to remember it exists, alongside the rest of your personal tax picture.
Buying through an LLC or with partners? Bring the structure question too. It changes the answers.
[ Book a pre-closing tax review ]
Call (212) 641-0673 or send the contact form. Our team gets back to you within 24 hours, and we are available evenings and weekends.
Confidential, and handled by a CPA or EA, not a call center.
Talk to us before the closing
Price the closing table with a CPA
Send us your deal outline: property type, price, mortgage balance, and whether a CEMA is on the table. We’ll tell you the tax on every line before contracts are signed.
Reviewed by George Dimov, CPA, New York, NY. Licensed in all 50 states, 15+ years advising on New York real estate transaction taxes. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.