For New York City properties priced at $1 million or more, buyers must account for the so-called mansion tax. It applies to many ordinary homes, not just luxury estates, so understanding it helps you budget and avoid surprises at closing.
What the mansion tax is
Introduced in 1989, it applies to residential property sold for $1 million or more, based on price rather than property type:
- Condominiums
- Cooperative apartments
- Townhouses
- Single-family homes
Since 2019 the tax is graduated, from 1% to 3.9% of the price. The buyer generally pays it at closing.
Current rates
Rates as published in 2025:
An estimate only, based on the rates above. Your attorney confirms the figure before closing.
Why it exists
In 1989 a $1 million price meant ultra-luxury real estate; today the same threshold captures many standard sales. Revenue from the 2019 expansion is earmarked for infrastructure, including transit. Critics argue the unchanged threshold burdens buyers who are not buying luxury property.
Exemptions and ways to reduce it
Exemptions are limited, such as certain transfers involving qualifying nonprofits. Structuring a deal to stay under $1 million or allocating value to furniture raises legal and tax concerns, and improper structuring can lead to penalties or reassessment.
Planning for it
It is a one-time closing cost on top of legal fees, title charges, and lender costs. It is not tax-deductible, though it may affect capital gains on resale. Budget for it early to avoid stress late in the deal.