NYS and NYC Transfer Taxes for Sellers (2025)
Go Back To Previous PageOur NYS and NYC Transfer Tax article details these taxes, including responsible parties, their origins, potential avoidance strategies, and tips to reduce transfer taxes and other closing costs.
What Is the NYS and NYC Transfer Tax?
New York City and New York State always seek ways to generate revenue. The real estate transfer tax is a significant source of income for them.
The NYC transfer tax, also known as the RPTT (Real Property Transfer Tax), applies to all real property transfers and cooperative shares exceeding $25,000.
It also applies to transfers of control (over 50%) in any corporation that owns property.
For New York City, this tax generated $1.5 billion in revenue and represents one of the highest closing costs for most sellers.
What is the current transfer tax rate in New York City?
The New York City transfer tax is applicable to all residential properties such as 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?
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 extra transfer tax on residential properties in NYC sold for more than $3 million, as well as on commercial properties exceeding $2 million.
| Property | Price | NY Tr. Tax | NYC Tr. Tax | Total Tr. Tax |
| NYC Condo | $1,500,000 | 0.4% or $6,000 | 1.425% or $21,375 | 1.825% or $27,375 |
| Westchester House | $975,000 | 0.4% or $3,900 | N/A | 0.4% or $3,900 |
| NYC Co-op | $475,000 | 0.4% or $1,900 | 1.0% or $4,750 | 1.4% or $6,650 |
| NYC Office Building | $125,000,000 | 0.65% or $812,500 | 2.625% or $3,281,250 | 3.275% or $4,093,750 |
What is the New York State Transfer Tax Rate?
The NY State transfer tax rate is 0.4% for properties sold under $3,000,000, plus an extra 0.25% for sales of $3,000,000 or more.
Therefore, the total NYS transfer tax for a $3 million property amounts to 0.65%.
For instance, selling a $1,000,000 condo results in a $4,000 payment to New York State and $14,250 to the city. In contrast, selling a $3,000,000 condo requires paying $19,500 to New York State.
Who Pays The NYS and NYC Transfer Tax?
The seller is generally responsible for paying the transfer tax. The main exception is when buying in a new development, where sponsors often attempt 
to pass the tax on to buyers. However, this is highly negotiable and depends on the current real estate market. In a hot market, sponsors tend to insist on passing the tax to buyers. Conversely, in a softer market where buyers have more leverage, they can negotiate for the sponsor to cover the cost.
The only exception to the rule that a buyer must pay the tax is when the seller decides to skip town. If this happens, the buyer will become responsible for the transfer tax. The local and state governments are getting paid.
If you’re selling a home in NYC, estate agents refer to your total city and state tax bill as the “NYC Transfer Tax.”
What Is The History Of The NYC Real Property Transfer Tax?
New York City implemented the transfer tax in 1919 and has experienced significant growth since then. At first, the fee was only required for transferring real property, so co-op sellers were exempt. By 1959, sellers paid a 0.5% transfer tax, which is much lower than the current city tax of 1.425%.
Another local transfer tax to worry about is the mansion tax, introduced in 1989. Luckily for sellers, the purchaser pays the mansion tax.
Is There a Way to Avoid the Transfer Tax?
You cannot avoid these taxes, as only the local and state governments tend to be exempt. Simultaneously, only a handful of properties are exempt (we’ll detail these situations below).
That said, there are ways to mitigate the cost of the transfer tax, which we’ll describe shortly.
So, Who And What Is Exempt From the Tax?
The NYC Department of Finance website outlines the few exemptions here.
Exempted institutions include:
- The US Government and its agencies.
- The New York State govt, its agencies, and political subdivisions
- Any foreign government, its representatives, or the head of a foreign diplomatic mission are exempt. The premises must be used solely for diplomatic or consular activities. Using them for other purposes could lead to tax liabilities.
Exempted transfers include those:
- The US is a member of the UN and other international organizations.
- To or from a charitable organization
- Transfers are used to secure debt.
- Transfers between an agent and its principal, or vice versa
- The transfer was carried out by a will’s executor; however, the transfer tax remains applicable upon sale.
- Where the beneficial ownership stays unchanged.
- To any government body that is exempt from paying the tax.
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.
Unlike commissions, transfer taxes are not negotiable and virtually impossible to avoid. The best way to mitigate these costs is to work with a broker who charges a lower fee to sell your home.
At NestApple, 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.
What is the transfer tax rate for vacant land in NYC?
In New York City, transfer tax rates for vacant land are higher than those for condos, co-ops, and one- to three-family homes. The NYC transfer tax is 1.425% for sales up to $500,000 and 2.625% for sales above that amount. For example, selling vacant land for exactly $500,000 incurs a 1.425% tax, but if the sale price exceeds $500,000—such as $501,000—the rate increases to 2.625%. Under specific conditions set by the NYC Department of Finance, vacant land may qualify for lower rates of 1% for sales at or below $500,000 and 1.425% for sales over that threshold.
When a vacant lot is transferred together with a one-, two-, or three-family house, the lower Real Property Transfer Tax will apply if all of these conditions are satisfied:
- The vacant lot is next to a house that has one, two, or three families.
- The house owner also owns the empty lot.
- The transfer of the vacant lot takes place under the same sale agreement as the nearby house.
- The vacant lot has been sold to the same buyer as the neighboring house.
- The vacant lot is transferred to the buyer along with the adjacent house through a single deed and/or simultaneous deed delivery.
In this case, the vacant lot is regarded as part of the neighboring house, and the full transfer of the property will be taxed at the lower Real Property Transfer Tax rate.
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
