The largest closing costs in a resale transaction for buyers are the NYC Mansion Tax of 1% for purchases of $1 million and over, and the Mortgage Recording Tax and title insurance for real property transactions, which include condos and houses but not coops.
It’s important to note that the $1 million threshold for the Mansion Tax is based on normal closing costs for a re-sale. If you pay additional closing costs on behalf of the seller, such as transfer taxes on behalf of a developer, then that will get added to your purchase price for the purposes of the Mansion Tax.
The Mortgage Recording tax only applies for real property such as single and multi-family houses and condominiums. Coops are not considered to be real property, and as a result loans for coop purchases are not considered to be mortgages. As a result, coop apartment buyers luck out and do not have to pay the Mortgage Recording Tax at all.
In a similar vein, title insurance is only applicable for purchasers of real property, and again coop apartment buyers luck out and do not have to pay any title insurance premiums. Title insurance is a significant closing cost that ranges from 0.4% to 0.5% of the purchase price on average. The exact amount of title insurance varies and is calculated through a complex formula which contains variable and fixed costs.