Shopping for a home around the million-dollar mark in New York? One line item can surprise even seasoned buyers: the mansion tax. You want clarity on when it kicks in, how much it costs, and how it fits with other city and county fees. This guide breaks down the 1 percent tax, shows where it applies in NYC and the Hudson Valley, and helps you plan for a smooth closing. Let’s dive in.
Mansion tax basics
The mansion tax is a New York State real estate transfer tax that applies when the purchase price for a residential property is 1,000,000 dollars or more. It is generally paid by the buyer at closing and must be paid for the transfer to be recorded.
When it applies
- Trigger: the tax applies at a purchase price of 1,000,000 dollars or more.
- Property type: residential transfers, commonly one to four family homes and cooperative apartments.
- Below 1,000,000 dollars: no mansion tax is due.
How it is calculated
- Rate: 1 percent of the full purchase price.
- Examples:
- 1,000,000 dollars purchase price equals 10,000 dollars tax.
- 1,250,000 dollars purchase price equals 12,500 dollars tax.
- 1,750,000 dollars purchase price equals 17,500 dollars tax.
- 2,500,000 dollars purchase price equals 25,000 dollars tax.
Who pays and when
- Buyer customarily pays this tax at closing.
- The closing attorney or title agent collects and remits it so your deed or co-op transfer can be recorded.
What properties are covered
One to four family homes
Most single-family homes and small multi-unit residences fall under the residential category for this tax.
Co-ops and share transfers
Cooperative apartment purchases that meet or exceed 1,000,000 dollars are treated similarly for mansion tax purposes. The buyer typically pays the tax at closing.
How it shows up at closing
You will see the mansion tax as a separate line in your closing disclosure or attorney’s settlement statement. Your attorney and title team handle the required filings when the deed or transfer documents are recorded. If the tax is not paid, the county clerk may refuse to record the transfer, which can delay proof of ownership.
NYC, Queens, and local taxes
Purchasing inside New York City, including Queens, may involve additional city and financing-related taxes that are separate from the mansion tax.
NYC Real Property Transfer Tax
If the property is inside New York City, the city’s Real Property Transfer Tax is separate from the state mansion tax. Rates and thresholds differ from the state rules and are handled at closing by your attorney and title team.
Mortgage recording tax
If you finance your purchase, many counties and New York City impose a mortgage recording tax when the mortgage is recorded. This is typically paid by the borrower at closing.
County or local transfer fees
Depending on the county, there may be additional transfer taxes or local fees. Your attorney and title company will confirm what applies to your property and location.
Budgeting examples to use now
Here are quick reference points for the mansion tax itself. Remember, these do not include other closing costs like title insurance, mortgage recording tax, or attorney fees.
- 900,000 dollars purchase: mansion tax 0 dollars.
- 1,000,000 dollars purchase: mansion tax 10,000 dollars.
- 1,250,000 dollars purchase: mansion tax 12,500 dollars.
- 1,750,000 dollars purchase: mansion tax 17,500 dollars.
- 2,500,000 dollars purchase: mansion tax 25,000 dollars.
Cash to close checklist
Use this high-level list to estimate total funds for closing in NYC, Queens, or the Hudson Valley:
- Down payment based on your loan program.
- Lender fees, appraisal, credit report, and any points.
- Mansion tax if the price is 1,000,000 dollars or more, calculated at 1 percent of the purchase price.
- Title insurance premiums for owner and lender policies.
- Recording and transfer fees charged by the state, city, or county.
- Attorney fees and closing or escrow services.
- Prepaid items and reserves for taxes and homeowner’s insurance.
- Mortgage recording tax if applicable.
- Inspections and any required survey.
Practical tips near the 1,000,000 dollar line
- Add a 1 percent line item as soon as your search includes homes at or above 1,000,000 dollars.
- Ask your lender and attorney early for a full estimate. Request a cash-to-close worksheet that shows the mansion tax as its own line.
- Co-op buyers should ask how the tax will be calculated for the share transfer and how it will be paid at closing.
- If you negotiate credits or concessions, confirm in writing how the mansion tax cost is allocated.
Work with a local guide
Clear planning and a steady process reduce surprises at the closing table. If you are buying in Queens or across the lower Hudson Valley, you deserve a team that understands both city and suburban rules and can keep your transaction on track from offer to keys. Connect with the white-glove advisory and neighborhood expertise you need with Jacqueline Morales and The Morales Group.
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FAQs
What is New York’s mansion tax and when does it apply?
- It is a 1 percent state transfer tax paid by the buyer on residential purchases of 1,000,000 dollars or more.
How is the mansion tax paid at closing?
- Your attorney or title agent collects it and remits it when the deed or transfer documents are recorded.
Does the mansion tax apply to co-ops in Queens?
- Yes, if the effective purchase price is 1,000,000 dollars or more, co-op share transfers commonly trigger the tax.
Is the mansion tax in addition to NYC’s Real Property Transfer Tax?
- Yes, the state mansion tax is separate from New York City’s Real Property Transfer Tax when the property is in NYC.
Can I avoid the tax by pricing at 999,999 dollars?
- Transactions below 1,000,000 dollars do not trigger the mansion tax, but verify total consideration and terms with your attorney.
Are large multi-family buildings subject to this tax?
- The mansion tax targets residential transfers, generally one to four units and co-ops, not larger commercial or five-plus unit buildings.
Does my mortgage amount affect the mansion tax?
- No, the tax is based on the full purchase price, not loan size.
