Statute names the payer
Seller for the state and city transfer taxes; buyer for the mansion tax.
The short answer
1% flat from $1M
The mansion tax is a flat 1 percent from $1,000,000, charged on the entire price. Inside NYC a second tax is added above $2,000,000.
Every threshold is a cliff
One dollar over changes the rate on the whole price.
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What is at play
More than one transfer tax at a New York closing
A typical New York City residential sale carries the state transfer tax, the city transfer tax and the mansion tax. Above $2 million the city supplemental is added, above $3 million an extra state charge, and the mortgage recording tax if financed.
01Who pays
Who pays each New York transfer tax
| Tax | Rate and threshold | Paid by, per statute |
|---|---|---|
| New York State transfer tax | 0.4% on all sales, plus 0.25% in NYC at $3M residential | Seller |
| NYC transfer tax (RPTT) | 1% to $500,000, then 1.425% | Seller |
| Mansion tax | Flat 1% of the whole price, from $1,000,000 | Buyer |
| City supplemental | 0.25% to 2.9%, from $2,000,000, NYC only | Buyer |
| Mortgage recording tax | On the financed amount, if financed | Buyer |
Who is liable if the transfer tax is not paid
Both sides, in the end. Each of these taxes names one payer, and if that payer defaults or is exempt the duty passes to the other. Both then carry joint and several liability.
Statute
- § Tax Law 1404 puts the state transfer tax on the seller and bars shifting it to the buyer except by contract.
- § NYC Admin Code 11-2104 does the same for the city tax.
- § Tax Law 1402-a puts the mansion tax on the buyer.
New York City can docket a judgment against either party. A buyer who covers the seller’s tax has a statutory cause of action against the seller for the tax, the interest and the penalties. Buying from an exempt government body does not remove the tax, because the exemption covers the government and not the buyer.
A contract can move the tax to the other side. For a one to three family house, an individual condo or a co-op unit, grossing up no longer applies.
02Thresholds are cliffs
Transfer tax thresholds apply to the whole price
None of these rates is progressive. Crossing a band changes the rate on the entire amount.
Mansion tax rates by price band
| Price band | Rate on the whole price |
|---|---|
| Under $1,000,000 | None |
| $1,000,000 to $1,999,999 | 1% |
| $2,000,000 and above | 1% + city supplemental of 0.25% to 2.9% in NYC |
New York City transfer tax rates by price band
| Property and price band | Rate on the whole price, paid by the seller |
|---|---|
| Residential, $500,000 or under | 1% |
| Residential, above $500,000 | 1.425% |
| Other property, $500,000 or under | 1.425% |
| Other property, above $500,000 | 2.625% |
Extra state transfer tax by property type and price
| Property and price | Rate on the whole price, paid by the seller |
|---|---|
| Residential under $3,000,000 | None |
| Residential $3,000,000 and above | 0.25% |
| Other property $2,000,000 and above | 0.25% |
Mortgage recording tax rates by loan amount
Mortgage recording tax measures the loan. A large loan on a modest price can cross the threshold when the price stays under it.
| Loan amount | Rate on the whole loan, paid by the buyer |
|---|---|
| Under $500,000 | 1.8% |
| $500,000 or more | 1.925% |
The lender pays 0.25 percent of that, and a co-op sale carries no mortgage recording tax at all, because co-op shares are personal property.
The $1 that costs $10,000
Total transfer tax either side of the $1M line
Sale at $999,999
State transfer, 0.4%$4,000
City RPTT, 1.425%$14,250
Mansion taxNone
Total$18,250
Sale at $1,000,000
State transfer, 0.4%$4,000
City RPTT, 1.425%$14,250
Mansion tax, 1%$10,000
Total$28,250
One dollar adds $10,000, and the step repeats at every higher tier.
Send us the price and which side you are on. A few thousand either side of a threshold can move the tax by tens of thousands.
03Who pays what, at a glance
Who pays each transfer tax at a New York City closing
Seller pays, by statute
New York State transfer tax
0.4% of the price, statewide. Plus 0.25% in NYC at $3M or more.
New York City transfer tax (RPTT)
1% at $500,000 or under. 1.425% above $500,000.
Buyer pays, by statute
Mansion tax
A flat 1% from $1,000,000, charged on the whole price, statewide.
City supplemental tax
NYC only, from $2,000,000. 0.25% rising to 2.9%.
If one side does not pay, the other becomes liable and both can be pursued.
Rates and thresholds verified against NYS and NYC publications, August 2026. Not tax advice.
04Co-ops
Co-op sales pay transfer tax too
A co-op sale transfers shares in a corporation rather than a deed. Transfer tax still applies. New York City taxes the transfer of an economic interest in real property, and co-op sales are squarely within it.
The same logic reaches transfers of entities that hold real property, which is why restructuring an LLC that owns a building is not automatically a tax-free move.
05Basis effect
Transfer tax belongs in your basis and your gain
Transfer tax changes what you owe on the sale, not only what you pay at the closing.
Seller
Transfer tax paid is a cost of sale. It reduces the amount realized, which reduces the capital gain.
Buyer
Mansion tax paid is part of the cost of acquiring the property, so it raises basis and reduces the gain when you sell.
Worked example
On a $2M purchase the buyer pays $25,000 — 1% mansion tax and 0.25% city supplemental. All of it goes into basis.
Owners who never recorded it overstate their gain by that amount years later, and by then the closing statement is usually long gone. Keep it with the deed.
06FAQ
Transfer tax FAQs
Who pays the transfer tax in New York, the buyer or the seller?
Both, depending on the tax and on whether it gets paid. Tax Law 1404 and NYC Admin Code 11-2104 name a payer for each one, then make the other side liable if that payer defaults or is exempt.
Does the mansion tax apply to the whole price?
Yes, every dollar of it. Crossing a band sets the rate for the entire purchase, so the cost of that last dollar is the whole tax it triggers.
Do co-op sales pay transfer tax?
Yes, at the same rates as a condo or a house. What the buyer acquires is shares and a proprietary lease, and New York taxes that as an interest in the underlying building.
Can I deduct transfer tax?
No. It is not a deduction, but it does change your gain. A seller treats it as a cost of sale that reduces the amount realized. A buyer adds mansion tax to basis, which reduces the gain on a later sale.
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Number before the closing
Get the number before the closing
Tell us the price, the property type, and which side you are on. We will give you the transfer tax figure and show you where it belongs in your basis. Call (212) 641-0673 or send the contact form. No charge for the conversation.
Reviewed by George Dimov, CPA, New York, NY. Serving clients in all 50 states, 15+ years advising buyers and sellers on New York property transactions. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.