A transfer tax is a tax on transferring real estate, based on the price. A New York City sale has two:
- the New York State transfer tax: 0.4%, or 0.65% on home sales of $3 million or more and other sales of $2 million or more
- the NYC Real Property Transfer Tax, or RPTT: 1% to 2.625%
The seller pays both by default. On a home purchase, the buyer pays two more state taxes. One is the 1% mansion tax at $1 million and up. The other is a supplemental tax that starts at $2 million and applies only in New York City.
This guide covers the five boroughs. The state taxes apply statewide. But the 0.65% rate and the supplemental tax apply only in a city of one million or more people, which means only NYC. Outside the city, see Westchester closing costs and Yonkers, Mount Vernon and Peekskill transfer taxes.
The taxes at a glance
| Tax | Default payer | Rate | Applies at |
|---|---|---|---|
| NYS transfer tax | Seller | 0.4% | Over $500 |
| NYS additional base tax | Seller | +0.25% (0.65% total) | Res. $3M+; other $2M+ |
| NYS mansion tax | Buyer | 1% | Residential $1M+ |
| NYS supplemental tax | Buyer | 0.25% to 2.9% | Residential $2M+ |
| NYC RPTT | Seller | 1% to 2.625% | Over $25,000 |
For the state taxes, “residential” means a one-, two- or three-family house, a condo unit or a co-op apartment. It includes property used only partly as a home (mansion tax law).
New York State transfer tax
The basic state tax is $2 for each $500 of the price, or part of $500. That is 0.4% (state transfer tax law). In NYC, an extra $1.25 per $500 is added when the price is $3 million or more for a home, or $2 million or more for any other property. The combined rate is then 0.65%. This higher rate has applied since July 1, 2019 (Tax Department memo).
Both thresholds are cliffs. A $2,999,999 NYC condo pays 0.4% on the full price. A $3,000,000 condo pays 0.65% on the full price.
Who pays, and the 2021 change
The seller pays the state transfer tax. If the seller doesn’t pay or is exempt, the buyer must pay. The buyer can then claim the tax, interest and penalties back from the seller (state who-pays rule). So an exempt seller, such as a government agency, can leave the buyer owing the tax.
Since July 1, 2021, the tax can’t be charged to the buyer, directly or indirectly, unless the contract says so. When a home buyer pays the state tax under the contract, that payment is no longer added to the taxable price for the state tax. This add-on is called the “gross-up” (Stewart bulletin).
Mansion tax and the NYC supplemental tax
The mansion tax is 1% of the home’s price when the whole sale is $1 million or more (mansion tax law). It’s a tax on the whole price, not just the part over $1 million. $999,999 owes nothing; $1,000,000 owes $10,000. The buyer pays. If the buyer doesn’t pay or is exempt, the seller must.
In NYC, home purchases of $2 million or more also owe the supplemental tax, paid by the buyer. The total price sets the rate, and the rate applies to the full price of the home:
| Price | Supplemental rate | Mansion + supplemental |
|---|---|---|
| $2M to under $3M | 0.25% | 1.25% |
| $3M to under $5M | 0.50% | 1.50% |
| $5M to under $10M | 1.25% | 2.25% |
| $10M to under $15M | 2.25% | 3.25% |
| $15M to under $20M | 2.50% | 3.50% |
| $20M to under $25M | 2.75% | 3.75% |
| $25M and up | 2.90% | 3.90% |
Two details from the Tax Department memo:
- Mixed-use property. Only the home part of the price is taxed, but the total price picks the rate.
- Several units, one buyer. Separate condo or co-op units are tested one at a time, unless they are combined or used together.
NYC Real Property Transfer Tax (RPTT)
The RPTT is a city law run by the NYC Department of Finance (DOF). It doesn’t apply when the price is $25,000 or less. The rate depends on the property type and whether the price is over $500,000 (DOF RPTT page):
| Property | $500,000 or less | Over $500,000 |
|---|---|---|
| 1-3 family house, condo unit, co-op unit | 1% | 1.425% |
| All other (commercial, 4+ family, land) | 1.425% | 2.625% |
The higher rate applies to the whole price, not just the part above $500,000. A $500,000 condo owes $5,000 of RPTT. A $1,000,000 condo owes $14,250.
The seller pays the RPTT. The buyer also owes it if the seller doesn’t pay or is exempt. Both must sign the return. It’s due within 30 days after the deed is delivered, even when no tax is due (DOF).
The 2021 state change didn’t change the RPTT. Title industry guidance still treats seller taxes paid by the buyer as part of the price for the RPTT. That includes any state transfer tax the buyer pays (Stewart bulletin; Nixon Peabody).
Existing mortgages and co-op sales
On a one- to three-family house or a condo unit, neither tax counts a mortgage or lien that stays on the property after the sale. On commercial and other property, a mortgage that stays on the property after the sale counts as part of the price for the RPTT. It also counts for the state tax when the price is $500,000 or more.
A co-op sale transfers shares and a lease, not a deed. Both the state tax and the RPTT still apply. The RPTT covers “transfers of cooperative housing stock shares” (DOF). A co-op unit also counts as a home for the state taxes.
When you resell a co-op apartment, the price doesn’t include the unit’s share of the building’s own mortgage. So a $1.2 million co-op owes the same transfer and mansion taxes as a $1.2 million condo. What it doesn’t owe is mortgage recording tax on the buyer’s loan, because no mortgage is recorded. For the title side, see buying a co-op: lien searches in NYC.
Transfer tax calculator: two NYC condo examples
These are hypothetical condo resales. No mortgage is taken over, and each side pays its share under the law.
$800,000 condo
| Tax | Calculation | Amount | Payer |
|---|---|---|---|
| NYS transfer tax | $800,000 × 0.4% | $3,200 | Seller |
| NYC RPTT | $800,000 × 1.425% | $11,400 | Seller |
| Mansion tax | Under $1M | $0 | Buyer |
| Supplemental tax | Under $2M | $0 | Buyer |
| Seller total | $14,600 | ||
| Buyer total | $0 |
$3,500,000 condo
| Tax | Calculation | Amount | Payer |
|---|---|---|---|
| NYS transfer tax | $3,500,000 × 0.65% | $22,750 | Seller |
| NYC RPTT | $3,500,000 × 1.425% | $49,875 | Seller |
| Mansion tax | $3,500,000 × 1% | $35,000 | Buyer |
| Supplemental tax | $3,500,000 × 0.5% | $17,500 | Buyer |
| Seller total | $72,625 | ||
| Buyer total | $52,500 |
The state figures match the Tax Department’s own $3.5 million example. To run your own numbers:
- Round the price up to the next $500 for the state tax.
- Pick the RPTT rate by property type and the $500,000 line.
- Add the buyer’s taxes if the price reaches $1 million or $2 million.
The buyer’s mortgage recording tax is a separate charge. See mortgage recording tax in NYC and Westchester.
New condos from the sponsor: the buyer usually pays
When you buy a new condo from the developer (the sponsor), the purchase agreement customarily makes you pay the seller’s transfer taxes. That’s a contract term, not the law. State law now requires the shift to appear in the contract between seller and buyer (Nixon Peabody).
The cost is bigger than it looks. The seller taxes you pay are added to the price for the RPTT (the gross-up described above). The state tax on a home is no longer grossed up. Read the offering plan and purchase agreement before signing. You can ask the title closer for a calculation on the actual contract price.
Exemptions
Both taxes exempt sales to government bodies, and transfers made only to secure a loan. A government seller is itself exempt, which shifts the tax to the buyer (state exemptions; DOF).
The exemption owners use most covers a change in the form of ownership only. An example is deeding a property into an LLC with the same owners in the same shares. It applies only to the extent the beneficial owners (the people who actually own the property) stay the same. How it works, and how a later investor can undo it, is in deeding a NYC rental into an LLC. Exempt transfers still need full returns.
Both taxes also apply when someone transfers a controlling interest (50% or more) in a company that owns the property, even though no deed is recorded (DOF; state definitions).
Forms, filing and deadlines
For deeds in Manhattan, Brooklyn, Queens and the Bronx, the returns are prepared online in ACRIS, the city’s land records system. They’re filed with the City Register when the deed is recorded:
| Form | Covers | Deadline |
|---|---|---|
| TP-584-NYC | All NYS transfer taxes | 15 days after delivery |
| NYC-RPT | NYC RPTT | 30 days after delivery |
| RP-5217NYC | Sale data for assessors | With the deed |
The state deadline is set by state law. TP-584-NYC is the state form for every NYC sale (NYS Tax Department). The RP-5217NYC fee is $125 for one- to three-family homes and residential condos and $250 for other property (DOF instructions). On Staten Island, deeds are recorded with the Richmond County Clerk. The RPTT return is filed both through ACRIS and on paper with that office (DOF).
In practice the title closer collects the taxes at closing by check and submits them with the recording package. That keeps both deadlines. A late RPTT return costs 5% per month, up to 25%. Late payment costs 0.5% per month, up to 25%, plus interest (DOF). The taxes appear on the title bill; see the title bill explained.
Details for attorneys and title professionals
- Where each rule is. The base and additional state rates, the exclusion of continuing liens, the co-op underlying-mortgage exclusion, the controlling-interest rule and the exemptions are each in a separate part of the state and city laws. Official sources lists the exact sections.
- The $3.5 million example. The state figures in the example above match Example 7 in the Tax Department memo.
Official sources
- New York Tax Law § 1401 (definitions; (b) and (e) controlling interests; (d) co-op underlying mortgage), § 1402 (base and additional tax; continuing liens), § 1402-a, § 1402-b, § 1404, § 1405 (exemptions; (b)(6) mere change of identity) and § 1410
- NYS Department of Taxation and Finance, TSB-M-19(1)R (Example 7), real estate transfer tax overview, TP-584-NYC instructions and TP-584 instructions
- NYC Administrative Code, Title 11, Chapter 21 (RPTT), §§ 11-2101 to 11-2106 (§ 11-2102 rates, (b)(2) co-op underlying mortgage, (f) continuing liens; §§ 11-2104 and 11-2105 who pays and returns; § 11-2106(b)(8) mere change of identity)
- NYC Department of Finance, Real Property Transfer Tax (RPTT) and RP-5217NYC instructions
- Stewart Title, Bulletin NY000661a (2021 amendment and RPTT gross-up)
- Nixon Peabody, practical implications of the 2021 transfer tax amendment