8.1 New York Transfer Taxes & Mansion Tax
Key Takeaways
- NYS Real Estate Transfer Tax (RETT) is $2.00 per $500 of consideration (0.40% / $4 per $1,000), statutorily paid by the seller using Form TP-584.
- NYC Real Property Transfer Tax (RPTT) imposes a 1.000% rate on residential sales of $500,000 or less, and 1.425% on residential sales exceeding $500,000.
- NYS Mansion Tax imposes a 1.00% tax on residential property purchases of $1,000,000 or more, statutorily paid by the buyer across the full purchase price.
- In New York City, a progressive multi-tiered Mansion Tax structure applies up to 3.90% for residential purchases of $25,000,000 or higher.
- An additional Supplemental NYS RETT of 0.25% applies to NYC residential sales of $3,000,000 or more, raising the effective state transfer tax rate to 0.65%.
8.1 New York Transfer Taxes & Mansion Tax
Introduction to New York Real Estate Transfer Taxes
In New York State, the conveyance of real property or an interest therein is subject to mandatory transfer taxation at the state level and, in certain municipal jurisdictions, at the local level. Real estate brokers and managing brokers must possess a comprehensive understanding of these transfer taxes to accurately advise clients on closing costs, review settlement statements, and prevent transaction delays. Transfer taxes are statutory obligations imposed upon the transfer of title or controlling economic interest in real property.
The primary transfer tax obligations encountered in New York real estate transactions include:
- The New York State Real Estate Transfer Tax (RETT) under Tax Law Article 31 (§ 1402).
- The New York City Real Property Transfer Tax (RPTT) under NYC Administrative Code Chapter 21.
- The New York State Mansion Tax and NYC Progressive Mansion Tax Tiers under Tax Law § 1402-a.
New York State Real Estate Transfer Tax (RETT)
Statutory Rate and Calculation Mechanics
Under NY Tax Law § 1402, the New York State Real Estate Transfer Tax (RETT) is imposed on each conveyance of real property or interest therein when the consideration exceeds $500. The statutory tax rate is $2.00 for each $500 of consideration, or fractional part thereof. Expressed as a percentage or rate per thousand:
- Base Rate: $4.00 per $1,000 of consideration (or 0.40% of total consideration).
Consideration includes the total sale price paid or required to be paid for the real property, including the amount of any mortgage, lien, or encumbrance assumed by the buyer.
Statutory Responsibility: By default under NY Tax Law, the seller (grantor) is legally obligated to pay the state transfer tax. However, if the seller fails to pay or is statutorily exempt (such as a governmental entity), the buyer (grantee) becomes jointly and severally liable to pay the tax.
Supplemental NYS Real Estate Transfer Tax (NYC Residential Property)
Following the enactment of the Housing Stability and Tenant Protection Act (HSTPA) of 2019, New York State introduced a Supplemental RETT on residential real property transfers located in cities with a population of 1 million or more (currently applicable exclusively to New York City).
- Threshold: Consideration of $3,000,000 or higher.
- Supplemental Tax Rate: 0.25% ($1.25 per $500 of consideration).
- When combined with the base 0.40% RETT, the effective state transfer tax rate on NYC residential transfers of $3 million or more increases to 0.65% ($3.25 per $500 of consideration).
Administrative Tax Return Filing: Form TP-584
All real property conveyances in New York require the execution and filing of Form TP-584, titled the Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax. Form TP-584 must be signed by both grantor and grantee and submitted to the county clerk or City Register at the time the deed or co-op transfer documentation is presented for recording.
New York City Real Property Transfer Tax (RPTT)
Transactions involving real property located within the five boroughs of New York City (Manhattan, Brooklyn, Queens, Bronx, and Staten Island) are subject to the NYC Real Property Transfer Tax (RPTT) in addition to state transfer taxes. RPTT applies to conveyances of deeds, transfers of controlling economic interests (such as corporate stock or LLC membership interests conveying real property), and transfers of cooperative apartment shares.
NYC RPTT Rate Structure
The NYC RPTT tax rate depends on two primary factors: property classification (residential vs. commercial/non-residential) and total purchase price consideration.
| Property Type | Consideration Threshold | NYC RPTT Tax Rate |
|---|---|---|
| Residential (1–3 Family, Residential Condo Unit, Co-op Apartment) | $500,000 or less | 1.000% of consideration |
| Residential (1–3 Family, Residential Condo Unit, Co-op Apartment) | Over $500,000 | 1.425% of consideration |
| Commercial / Non-Residential (4+ Family Residential, Office, Retail, Industrial, Vacant Land) | $500,000 or less | 1.425% of consideration |
| Commercial / Non-Residential (4+ Family Residential, Office, Retail, Industrial, Vacant Land) | Over $500,000 | 2.625% of consideration |
Statutory Responsibility: Like the state RETT, the NYC RPTT is primarily paid by the seller (grantor). If the seller does not pay, the buyer is held liable. RPTT returns are filed electronically using NYC Form NYC-RPT through the ACRIS (Automated City Register Information System) platform.
New York Mansion Tax & NYC Progressive Tax Tiers
Statewide Base Mansion Tax
Under NY Tax Law § 1402-a, New York State imposes a Mansion Tax on transfers of residential real property (1–4 family dwellings, condominium units, cooperative apartments) where the total purchase price consideration is $1,000,000 or higher.
- Base Rate: 1.00% of total purchase price consideration.
- Statutory Responsibility: Unlike transfer taxes which are seller obligations, the Mansion Tax is statutorily imposed upon the buyer (grantee).
- Critical Threshold Rule: The Mansion Tax is a threshold-triggered tax, not a marginal tax. The moment consideration reaches or exceeds $1,000,000, the 1.00% tax applies to the entire purchase price, not just the amount exceeding $1M. For instance, a purchase price of $999,999 incurs $0 in Mansion Tax, whereas a purchase price of $1,000,000 incurs a $10,000 Mansion Tax liability at closing.
NYC Progressive Mansion Tax Tiers (Post-2019 Reform)
Effective July 1, 2019, New York State expanded Tax Law § 1402-a to implement a progressive, multi-tiered Mansion Tax schedule for residential real property located in cities with a population of 1 million or more (NYC). The progressive tax rates replace the flat 1.00% tax for higher-value transactions as follows:
| Purchase Price Consideration Range | NYC Progressive Mansion Tax Rate |
|---|---|
| $1,000,000 to $1,999,999 | 1.00% |
| $2,000,000 to $2,999,999 | 1.25% |
| $3,000,000 to $4,999,999 | 1.50% |
| $5,000,000 to $9,999,999 | 2.25% |
| $10,000,000 to $14,999,999 | 3.25% |
| $15,000,000 to $19,999,999 | 3.50% |
| $20,000,000 to $24,999,999 | 3.75% |
| $25,000,000 and above | 3.90% |
Comparative Worked Case Studies
To illustrate how these taxes combine at closing, consider two practical transaction scenarios in New York:
Case Study 1: Suburban Residential House (Westchester County)
- Property Type: Single-family home in White Plains, NY.
- Sale Price: $750,000.
- State RETT (Seller): $750,000 / $500 × $2.00 = $3,000 (or $750,000 × 0.40%).
- NYC RPTT: $0 (Outside NYC jurisdiction).
- Mansion Tax (Buyer): $0 (Purchase price is under $1,000,000 threshold).
Case Study 2: High-End NYC Residential Condo (Manhattan)
- Property Type: Condominium unit in Manhattan.
- Sale Price: $3,500,000.
- State RETT Base (Seller): $3,500,000 × 0.40% = $14,000.
- State RETT Supplemental (Seller): $3,500,000 × 0.25% = $8,750 (Applies because price >= $3M in NYC).
- Total NYS RETT (Seller): $14,000 + $8,750 = $22,750 (Effective rate 0.65%).
- NYC RPTT (Seller): $3,500,000 × 1.425% = $49,875 (Applies because residential price > $500,000).
- Total Seller Transfer Taxes: $22,750 + $49,875 = $72,625.
- NYC Mansion Tax (Buyer): $3,500,000 × 1.50% = $52,500 (Applies progressive tier for $3M–$4.999M).
Broker Disclosure & Professional Responsibilities
Real estate brokers in New York carry a professional fiduciary duty to ensure clients are fully informed of all tax obligations prior to entering into binding contracts. Failure to calculate transfer and mansion taxes accurately can create severe financial friction at the closing table or result in contractual default. Brokers should never provide definitive tax advice, but must supply accurate estimated closing cost sheets and advise clients to consult qualified tax attorneys or Certified Public Accountants (CPAs).
Under NY Tax Law § 1402, what is the New York State Real Estate Transfer Tax (RETT) owed by a seller on the sale of a property for $650,000?
A seller conveys a residential condominium unit in Manhattan for $750,000. What is the NYC Real Property Transfer Tax (RPTT) rate and tax amount owed by the seller?
A buyer purchases a Manhattan luxury condominium for $3,500,000. Under NY Tax Law § 1402-a (post-2019 NYC progressive tiers), what is the Mansion Tax rate and tax amount owed by the buyer?