Buying in Midtown and hearing whispers about the mansion tax? You are not alone. When most condos and co-ops you tour sit above $1 million, this one-time buyer tax becomes a real line item. In a few minutes, you will learn how the mansion tax works, how it stacks with other NYC closing taxes, and what to budget before you tour. Let’s dive in.
What the mansion tax is
The mansion tax is a one-time New York State tax paid at closing when you buy residential property at or above $1,000,000. It typically falls on you as the buyer unless the contract says otherwise. It applies to Midtown condos and co-ops, and also to 1–6 family homes statewide. Because many Midtown purchases exceed $1 million, it is a predictable expense you should plan for early.
What triggers the tax
The tax triggers when total consideration for the purchase is $1,000,000 or more. The taxable amount is based on the contract price and can include certain credits or upgrades if they are treated as part of the purchase consideration. For co-ops, it is calculated on the share price that conveys the apartment. For new developments, upgrades or amenity payments that are part of the agreement often increase the taxable base.
Who pays at closing
Standard practice is that the buyer pays the mansion tax at closing. That said, allocation is negotiable and should be addressed in the purchase agreement. In some markets sellers or sponsors may agree to cover part of the cost.
Mansion tax brackets
As of June 2024, New York State uses a progressive bracket structure. The rate applies to the full purchase price in the bracket.
- 1.00% on $1,000,000–$1,999,999
- 1.25% on $2,000,000–$2,999,999
- 1.50% on $3,000,000–$4,999,999
- 2.25% on $5,000,000–$9,999,999
- 3.25% on $10,000,000–$14,999,999
- 3.50% on $15,000,000–$19,999,999
- 3.75% on $20,000,000–$24,999,999
- 3.90% on $25,000,000 and above
Note: Tax rules can change. Always confirm current rates with your attorney or title company before you sign a contract.
How other NYC taxes stack
In NYC, the mansion tax is only one part of your closing taxes. Several others commonly apply:
- New York State Real Estate Transfer Tax (RETT). This is a separate state tax on transfers. Planning guides often use about 0.4% of the purchase price for estimates. Confirm the exact rate for your deal.
- NYC Real Property Transfer Tax (RPTT). NYC charges its own transfer tax, with a higher residential tier that typically applies to Midtown transactions above $500,000. Confirm your rate and tier for accuracy.
- Mortgage Recording Tax (MRT). If you finance, NYC’s MRT applies to the mortgage amount. The rate depends on loan size and lender classification and is often materially higher than in other counties. Get an early estimate from your lender.
These taxes are additive. That means you can expect to pay the mansion tax plus the applicable state and city transfer taxes, and MRT if you take a mortgage.
Budget examples for Midtown
The figures below use the bracket table above and planning estimates for RETT, RPTT, and MRT. Exact amounts vary by deal and should be verified before you make an offer.
Example: $1,250,000 condo
- Mansion tax at 1.00%: about $12,500
- NYS RETT at about 0.4%: about $5,000
- NYC RPTT at higher residential tier, about 1.425%: about $17,813
- If financing, MRT is additional. At about 2.0% on a $1,000,000 mortgage, that would be about $20,000
Without a mortgage, the tax cluster is roughly $35,000. With a mortgage, add MRT.
Example: $2,500,000 condo
- Mansion tax at 1.25%: about $31,250
- NYS RETT at 0.4%: about $10,000
- NYC RPTT at about 1.425%: about $35,625
- MRT if financed: variable, large impact
Without a mortgage, expect about $76,000 in transfer and mansion taxes combined.
Example: $6,000,000 new development
- Mansion tax at 2.25%: about $135,000
- NYS RETT at 0.4%: about $24,000
- NYC RPTT at about 1.425%: about $85,500
- MRT if financed: additional and significant
Without a mortgage, the combined public tax load is about $244,500.
Example: $12,000,000 trophy property
- Mansion tax at 3.25%: about $390,000
- NYS RETT at 0.4%: about $48,000
- NYC RPTT at about 1.425%: about $171,000
Without a mortgage, that is about $609,000 in combined state and city transfer taxes plus the mansion tax.
Offer strategy tips
- Mind bracket thresholds. Moving an offer from $1,999,000 to $2,000,000 raises the mansion tax rate from 1.00% to 1.25% on the whole purchase price. Run the math before you finalize a number near a bracket edge.
- Negotiate allocation. In some deals, sellers or sponsors will cover part of the mansion tax or other closing costs. Be clear in the contract who pays what.
- Confirm taxable components. In new developments, upgrades, parking, storage, or amenity payments can be included in the taxable base. Ask your attorney and title company how each item is treated.
- Plan for financing costs. Lender fees plus the Mortgage Recording Tax can change affordability. Get MRT and closing cost estimates at pre-approval.
- Prepare funds for closing. The mansion tax is due at closing. Make sure you have liquidity beyond your down payment to cover all taxes and fees.
Pre-tour budget checklist
Before you tour or make offers, sketch a closing budget so you know your complete cost to close.
- Target purchase price and matching mansion tax bracket
- Estimated NYS RETT at about 0.4% of price
- NYC RPTT tier and estimate if price is above $500,000
- If financing: mortgage amount and an MRT estimate from your lender
- Lender charges: application, appraisal, and other fees
- Legal and title: attorney fee, title search, title insurance, recording fees
- Building fees: condo transfer fees or co-op application and board fees
- Possible building or sponsor charges: storage, parking, amenity deposits, or a co-op flip tax if applicable
- Prorations: common charges, co-op maintenance, and property tax adjustments
- Contingency: an extra 1–2% of price for closing surprises
- Co-op readiness: cash reserves and documentation often requested by Midtown co-op boards
Ask your attorney, title company, or lender for a preliminary closing estimate before you commit to a price.
Special situations
- Seller credits. A seller or sponsor may offer a credit to offset closing costs, including the mansion tax. Your attorney will review mechanics and any lender requirements.
- Entity purchases. Buying through an LLC or trust does not avoid the mansion tax. The tax applies to the transaction, not the buyer’s identity.
- Under $1 million. There is no mansion tax below $1,000,000. You should still budget for transfer taxes and recording fees as applicable.
Your next step
If you are targeting Midtown at or above $1 million, build the mansion tax, transfer taxes, and potential MRT into your numbers early. A clear plan helps you make confident offers, avoid surprises, and keep your timeline on track. If you would like a tailored closing estimate and strategy for your shortlist, connect with Leah Blesoff for discreet, data-driven guidance.
FAQs
What is the NYC mansion tax for Midtown buyers?
- It is a one-time New York State tax paid by buyers at closing on residential purchases at or above $1,000,000, commonly applicable to Midtown condos and co-ops.
At what price does the mansion tax apply?
- It applies when the total purchase consideration is $1,000,000 or more, based on the contract price and certain price-related items.
What are the current mansion tax rates?
- As of June 2024, rates run from 1.00% at $1,000,000 up to 3.90% at $25,000,000 and above, with several brackets in between.
Does the mansion tax apply to co-ops and condos?
- Yes. It applies to residential condos and co-ops, as well as 1–6 family homes, with co-ops taxed on the purchase price of the shares that convey the unit.
How do NYC transfer taxes and MRT affect my budget?
- In addition to the mansion tax, you will likely pay NYS RETT and NYC RPTT, and if you finance, the Mortgage Recording Tax on the mortgage amount. These costs are additive.
Can a seller or sponsor pay the mansion tax?
- Allocation is negotiable and should be addressed in the contract. In some deals, sellers or sponsors may cover part or all of the cost.
Are new development upgrades part of the taxable base?
- Often yes. Upgrades, parking, storage, or amenity payments included in the purchase agreement may increase the taxable base. Verify with your attorney and title company.
