NYC Transfer Taxes in 2026: What Buyers and Sellers Actually Pay

January 10, 2025 by Georges Benoliel

Many NYC sellers focus on the sale price and only later realize how much transfer taxes affect what they actually take home. Transfer taxes alone can run into the tens or even hundreds of thousands of dollars, depending on the transaction. If you’re buying or selling a condo, co-op, townhouse, or new development in New York City, understanding who typically pays transfer taxes—and when that can be negotiated—can materially affect your net proceeds or total cash to close. This guide explains how NYC transfer taxes work, who typically pays them, current rates, and strategies to manage total closing costs.

Quick Answer: Who Pays Transfer Taxes in NYC?

In a typical NYC resale transaction:

• Seller pays New York State transfer tax
• Seller pays New York City transfer tax
• Buyer pays mansion tax (if applicable)
• Buyer pays title, attorney, lender, and recording costs

That said, NYC real estate is highly negotiable. In sponsor sales and certain competitive negotiations, transfer tax responsibility can shift.

What Is a Transfer Tax?

When NYC real estate changes hands, transfer taxes often become a meaningful part of closing costs.

1. New York State Transfer Tax

This is imposed by New York State.

2. New York City Real Property Transfer Tax (RPTT)

This is imposed by New York City. In a typical Manhattan or Brooklyn resale, sellers usually absorb both city and state transfer taxes unless the contract says otherwise.

NYC’s transfer tax, formally called the Real Property Transfer Tax (RPTT), generally applies to most property transfers, including co-op share transfers above certain thresholds.

It also applies to transfers of control (over 50%) in any corporation that owns property.

What is the current transfer tax rate in New York City?

The New York City transfer tax applies to all residential properties, including condominiums, co-op units, and one- to three-family houses. The rate varies from 1% for properties under $500,000 to 1.425% for properties exceeding $500,000, and it applies to every residential real estate transaction.

Similar to the mansion tax, the transfer tax is calculated based on the purchase price rather than the property’s appraised value. For example, selling a property for $400,000 leads to a $4,000 tax payable to NYC. Conversely, selling a home for $1,000,000 results in a $14,250 tax.

What Is The NYS Transfer Tax?

In addition to NYC’s transfer tax, New York State imposes its own transfer tax on most property sales. New York State levies its transfer tax on all property transfers exceeding $500.

In July 2019, the state enacted a new law that levies an additional transfer tax on residential properties in NYC sold for more than $3 million and on commercial properties sold for more than $2 million.

1. New York State Transfer Tax: Current rate is 0.4% of the purchase price. Example: On a $2,000,000 sale: $2,000,000 × 0.4% = $8,000
2. New York City Transfer Tax: NYC rates vary by transaction size.

• Sales under $500,000 1.0%
• Sales of $500,000 or more 1.425% Example: On a $2,000,000 sale: $2,000,000 × 1.425% = $28,500

Example: Total Transfer Taxes on a $2M Condo Sale

That’s before brokerage commission, attorney fees, move-out costs, and any building fees.

Sponsor Sales: A Different Set of Rules

New development and sponsor transactions often shift costs to the buyer. Buyers may be asked to pay:

• Transfer taxes
• Sponsor attorney fees
• Working capital contribution
• Managing agent fees
• Title-related expenses

A purchase price discount is not always the most effective negotiation lever. In some cases, getting the sponsor to absorb transfer taxes creates more real economic value.

Can Transfer Taxes Be Negotiated?

Yes. Common negotiation strategies include:

• Asking the sponsor to absorb transfer taxes, especially in slower markets.
• Closing credits instead of price cuts: A lower purchase price may not help cash flow as much as seller-paid closing costs.
• Structuring financing efficiently: For financed condo purchases, techniques such as CEMA may reduce the mortgage recording tax.

So, Who And What Is Exempt From the Tax?

A handful of institutional or technical transfers may be exempt, including certain government, charitable, and debt-security transfers. These are edge cases rather than situations most residential buyers or sellers encounter. The NYC Department of Finance website outlines the few exemptions here.

How Can You Reduce Your Closing Costs And Mitigate the Transfer Tax?

Selling a property in New York City remains exceptionally costly due to high closing costs. Not counting the traditional 6% broker commission, transfer taxes represent sellers’ most considerable closing cost.

Transfer taxes are generally fixed, but the overall economics of a transaction are not. Sponsor concessions, financing structure, and brokerage commission can materially affect the seller’s net proceeds.

For many sellers, transfer taxes are unavoidable, but the commission structure remains one of the few major closing-cost variables that can be optimized. At NestApple, we help buyers and sellers think beyond headline price and focus on total transaction economics. We offer a full-service listing service for as little as 1%. The best NestApple agents will market your property, and you will save tens of thousands of dollars in closing costs by paying a lower commission. 

Common NYC Transfer Tax Mistakes

• Confusing mansion tax with transfer tax: Mansion tax is generally a buyer expense, while transfer taxes are typically seller expenses in resale transactions.
• Comparing offers based only on headline price: A higher contract price does not always mean better net proceeds if closing cost allocations differ.
• Assuming sponsor deals follow resale conventions, sponsor contracts often materially shift more costs to buyers.
• Ignoring financing structure: For some condo transactions, financing tools like CEMA can reduce the mortgage recording tax.

Final Thoughts

NYC closing costs are rarely intuitive. Two deals with the same purchase price can have dramatically different economics depending on whether the property is a co-op, condo, townhouse, or sponsor unit—and who negotiates which closing costs. For many NYC sellers, transfer taxes are fixed, but the brokerage structure is not. Optimizing commission costs can materially improve net proceeds.

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