Shopping for a Midtown condo and hearing about the “mansion tax”? Even at the $1 million mark, that small line on your closing statement can mean tens or hundreds of thousands of dollars. If you want clarity before you make an offer, you’re in the right place. You’ll learn what the mansion tax is, how rates work today, how it pairs with New York City transfer costs, and what it means for your cash to close on luxury 1–3 bedroom condos in Midtown. Let’s dive in.
What the New York mansion tax covers
New York State imposes an additional real property transfer tax, commonly called the mansion tax, when the price is $1,000,000 or more. As the buyer, you generally pay it at closing, and your attorney coordinates collection and remittance. It applies to most residential transfers statewide, including condominiums and cooperative interests in New York City. The mansion tax is separate from New York City’s own transfer tax and other state or city taxes and fees.
Current mansion tax rates
New York uses a progressive schedule that increases with price. Confirm current rates with your attorney, since state guidance can change. As of mid‑2024, commonly cited brackets are:
- $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%
These percentages are in addition to the basic New York State transfer tax and any New York City transfer taxes and mortgage recording taxes.
Midtown price context for 1–3 bedroom condos
If you are looking around Central Park South and Midtown East, typical luxury ranges often look like this:
- Luxury 1‑bed near Central Park South: $1.5M–$3.5M
- Luxury 1‑bed in Midtown East along Park Avenue and 57th–59th corridors: $1.25M–$2.5M
- Luxury 2‑bed in Midtown East or near the Park: $2.5M–$8M
- Luxury 3‑bed around Central Park South/Midtown East: $5M–$20M
Your building, views, finishes, and services will drive where a specific home sits within these ranges. Use these as conservative planning brackets while you run early numbers with your team.
What this means for your cash to close
Below are simple, illustrative calculations that combine the mansion tax with the New York State basic transfer tax and the New York City Real Property Transfer Tax. Exact figures vary by transaction. Always confirm with your attorney and lender.
Example: $1,500,000 condo near Central Park South
- Mansion tax at 1.00%: $15,000
- NY State basic transfer tax at about 0.40%: $6,000
- NYC Real Property Transfer Tax for residential over $500k at about 1.425%: $21,375
- Combined transfer taxes (approximate): $42,375
If you finance, add mortgage recording tax on the loan amount, plus lender fees, title insurance, and attorney fees. On a $1.5M purchase, transfer taxes alone can easily reach the $40k–$60k range before other closing costs.
Example: $4,250,000 condo in Midtown East
- Mansion tax at 1.50%: $63,750
- NY State basic transfer tax at about 0.40%: $17,000
- NYC Real Property Transfer Tax at about 1.425%: $60,562.50
- Combined transfer taxes (approximate): $141,312.50
At mid‑single‑digit millions, the mansion tax becomes a large six‑figure line item. Build this into your liquidity plan early.
Example: $12,000,000 condo near Central Park South
- Mansion tax at 3.25%: $390,000
- NY State basic transfer tax at about 0.40%: $48,000
- NYC Real Property Transfer Tax at about 1.425%: $171,000
- Combined transfer taxes (approximate): $609,000
At the upper‑luxury tier, the mansion tax alone becomes a major closing expense. Confirm precise amounts with counsel before you finalize funding and currency moves.
Other taxes and common closing costs in NYC
- New York City Real Property Transfer Tax. For most residential transfers over $500,000, the higher city rate applies. This is in addition to state taxes and the mansion tax. Your attorney will calculate the exact city rate.
- New York State basic real estate transfer tax. This is a separate state tax, often listed around 0.40%. Your closing statement will show the precise amount.
- Mortgage recording tax. If you take a mortgage, state and city mortgage recording taxes apply on the loan amount. Depending on loan size, this can add several thousand to tens of thousands of dollars.
- Lender, title, and attorney fees. Appraisal, credit, underwriting, title insurance, and legal fees are standard closing costs in NYC.
- Co‑op differences. Mansion tax applies at $1M+ for co‑ops as well. The mechanics differ because you are purchasing shares and a proprietary lease, and building applications and board approvals follow co‑op procedures.
- Other building items. Move‑in fees, application fees, required deposits, and possible reserves or escrows can affect cash to close.
Planning steps to avoid surprises
Run numbers early and get firm estimates
Ask your lender for a Loan Estimate and an early closing disclosure as soon as you have pre‑approval. Ask your attorney for a preliminary closing statement that shows the mansion tax, state and city transfer taxes, title fees, and legal fees once your contract is signed. Early clarity prevents wire‑day surprises.
Build a simple budgeting checklist
- Earnest money deposit
- Down payment per lender and contract terms
- Mansion tax, NYS transfer tax, and NYC RPTT
- Mortgage recording tax if financing
- Title insurance, recording fees, bank fees, appraisal, and inspection
- Attorney fees and any co‑op or condo application and move‑in fees
- Reserves for common charges and property tax escrows if required
Coordinate with counsel and lender on timing
Your attorney collects and remits transfer taxes at closing. Always verify wire instructions by phone using a known number, as wiring fraud is a real risk. If you plan to purchase through an LLC or trust, loop in counsel early to confirm documentation and how the structure appears on tax forms.
Ways buyers manage cash flow
Seller credits toward transfer taxes are not typical in the luxury Midtown market, though concessions can be negotiated in some deals. You can also explore loan structure to balance mortgage recording tax against liquidity needs. Some building fees are paid before closing, so include them in pre‑closing cash planning.
International buyer considerations
Begin international wires early and confirm all bank documentation and anti‑money‑laundering requirements. If exchange rates matter to you, consider a hedging approach. Some buyers use a U.S. entity for privacy or tax planning, which can add filings and complexity. Consult your legal and tax advisors on cross‑border issues.
Reduce surprises before closing
About 30–45 days before closing, request a draft closing statement that lists every tax and fee. Confirm mortgage recording tax with the lender and verify whether the seller is covering any costs that are customarily buyer‑paid. Small adjustments can occur at the table, so keep a cushion.
A simple buyer timeline
- Before contract. Secure pre‑approval, gather proof of funds, and consult counsel if you plan to use an entity.
- After offer acceptance and contract signing. Ask your attorney for a preliminary closing statement that includes mansion tax and transfer taxes, and order the title search.
- Two to four weeks before closing. Obtain the final Loan Estimate or closing disclosure, confirm wire instructions, and review final pay‑offs.
- Day or two before closing. Send wires, confirm the closing appointment, and verify required identification and entity documents.
- At closing. Pay your down payment and all closing costs, including the mansion tax, and receive keys as per the contract.
Planning your Midtown purchase with clear, conservative numbers will keep your search focused and your closing smooth. If you would like a quiet, step‑by‑step review of your options and a precise framework for cash to close, request a confidential consultation with Hilary James.
FAQs
What is the New York mansion tax and who pays it?
- It is an additional New York State transfer tax on residential purchases of $1,000,000 or more, and the buyer generally pays it at closing.
Does the mansion tax apply to co‑ops in NYC?
- Yes, co‑op share sales at or above $1,000,000 are subject to the mansion tax.
How much is the NYC transfer tax for Midtown condo purchases?
- For most residential transactions over $500,000, buyers should expect the higher NYC Real Property Transfer Tax bracket, commonly about 1.425% in examples.
When is the mansion tax due for Midtown buyers?
- It is due at closing, and your attorney or closing agent collects and remits it as part of the closing process.
Can buying through an LLC avoid the mansion tax in New York?
- Generally no; the tax is based on the sale price or consideration, and using an LLC does not usually change liability, though filings and documents may differ.
What should international buyers know about funding the mansion tax?
- Start international wires early, confirm bank documentation, plan for currency timing, and coordinate with counsel on entity use and cross‑border tax considerations.
