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How Much Is the NYC Transfer Tax?

The NYC Transfer Tax is a seller closing cost which is 1.4% for sale prices of $500k or less and 1.825% for sales above $500k. There is actually both a NYC and a NYS Transfer Tax, however most real estate professionals simply refer to the combined Transfer Taxes as the ‘NYC Transfer Tax.’

The Transfer Tax figures of 1.4% and 1.825% include both the NYC and NYS component. The NYS Transfer Tax accounts for 0.4% of the Transfer Tax rates mentioned above.

The 1% Mansion Tax in NYC is technically an additional NYS Transfer Tax on sales of $1m or more. However, it’s not generally included when referring to Transfer Taxes since the Mansion Tax is customarily paid by buyers while the standard Transfer Taxes are paid by sellers.

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Who Pays the Transfer Tax in NYC?

The Real Estate Transfer Tax in NYC is customarily paid by sellers. This includes both the NYC and NYS components. However, the reverse is true when it comes to new construction, condo conversions and any other type of ‘sponsor sales.’ In these instances, the buyer customarily pays the city and state Transfer Taxes.

Asking a buyer to pay the transfer taxes for a traditional private resale of a condo, co-op or house in NYC is a non-starter. However, it’s not uncommon for buyers to negotiate with a developer on who pays the Transfer Taxes. If the developer (sponsor) is highly motivated to sell, they may agree to pay some or all of your ‘sponsor closing costs’ which include Transfer Taxes and sponsor attorney fees.

Conversely, a developer probably won’t be willing to cover any sponsor closing costs if they’re having no trouble putting units into contract. A seasoned buyer’s agent can help you determine whether or not it’s worthwhile to ask the developer to cover some or all of your sponsor closing costs as part of your initial offer.

Pro Tip: Buyers of new construction and condo conversions are often asked to make an initial capital contribution of a few months’ worth of common charges to help establish the building’s reserve fund. Developers will never agree to pay for this, as it’s not technically a closing cost and the money goes into your own building’s coffers.

Overall closing costs for sellers in NYC are between 8% to 10% of the sale price. The largest seller closing cost is the traditional 6% broker commission. Buyer closing costs are approximately ~4% for a condo if you’re financing and ~2% if you’re paying all cash. Buyer closing costs are approximately 1% to 2% of the sale price if you’re buying a co-op.

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What Are the NYC and NYS Transfer Tax Rates?

The combined NYC and NYS Transfer Tax rates are 1.4% for sales of $500k or less and 1.825% for anything above $500k. The NYC component is 1% and 1.425% (above $500k), and the NYS component is 0.4% of the sale price.

The NYC Transfer Tax rates are different for property types other than condos, co-ops and one- to three-family houses. For other types of real estate transfers, the NYC Transfer Tax (RPTT) rates are 1.425% for sales of $500k or less and 2.625% for anything above $500k. When you add the NYS Transfer Tax of 0.4%, the combined rates for other property types are 1.825% and 3.025%.

The combined NYC and NYS Transfer Tax rates are 1.4% for sales of $500k or less and 1.825% for anything above $500k.

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How Is the Transfer Tax Calculated in NYC?

You can calculate the NYC and NYS Transfer Taxes by multiplying the sale price by the applicable combined Transfer Tax rates of 1.4% for sale prices of $500k or less and 1.825% for anything above $500k.

If you’re selling a multifamily home in NYC with 4 or more units, the higher NYC transfer tax rates of 1.425% and 2.625% would apply. Chances are that you’d pay the higher rate of 2.625% since the lower rate only applies to sales of $500k or less. Remember that you’ll need to add the 0.4% NYS Transfer Tax rate as well, so the combined rate is 3.025% for sales above $500k.

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Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).

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