Buying a property at $1 million or above in New York City? You’ll owe a mansion tax of 1% to 3.9% of the purchase price. Here’s how the brackets work and what you can do about it.
The mansion tax is a one-time transfer tax paid by the buyer on any purchase of residential property in New York City valued at $1 million or more. It applies to condos, co-ops, townhouses, and new development purchases alike. Despite the name, you don't need to be buying a mansion — a one-bedroom apartment in Manhattan can easily trigger it.
The tax was originally enacted in 1989 under Governor Mario Cuomo as a way to close a state budget gap. At the time, $1 million genuinely represented the top tier of the NYC housing market. Adjusted for inflation, that 1989 threshold would be approximately $2.67 million in 2026 dollars — but the floor has never been raised. The result is that the mansion tax now hits a much broader range of buyers than originally intended.
In 2019, the tax was expanded from a flat 1% rate to a progressive 8-bracket system for properties $2 million and above, as part of a funding mechanism for the MTA. If you're exploring the full picture of what it costs to buy in New York, our guide to NYC buyer closing costs breaks down every line item you'll see at the closing table.
The NYC mansion tax uses a flat-rate system, not a marginal one. That means the entire purchase price is taxed at the rate corresponding to your bracket — not just the amount above the threshold. This is an important distinction that catches many buyers off guard.
| Purchase Price | Tax Rate | Tax on a Sale at Bracket Floor |
|---|---|---|
| $1M – $1,999,999 | 1.00% | $10,000 |
| $2M – $2,999,999 | 1.25% | $25,000 |
| $3M – $4,999,999 | 1.50% | $45,000 |
| $5M – $9,999,999 | 2.25% | $112,500 |
| $10M – $14,999,999 | 3.25% | $325,000 |
| $15M – $19,999,999 | 3.50% | $525,000 |
| $20M – $24,999,999 | 3.75% | $750,000 |
| $25M+ | 3.90% | $975,000 |
Because the mansion tax is a flat rate on the full price — not marginal — buying at exactly $1,000,000 costs you $10,000 in mansion tax, while buying at $999,999 costs you $0. That single dollar triggers a $10,000 bill. This is why experienced buyers and agents negotiate aggressively around the $1 million threshold.
Calculating the mansion tax is straightforward once you know the bracket system. Here's the formula:
Mansion Tax = Purchase Price × Applicable Tax Rate
Let me walk through three real-world examples at different price points:
For a $1.8 million condo in Gramercy, the rate is 1.00%: $1,800,000 × 0.01 = $18,000. For a $4.5 million co-op on the Upper East Side, the rate jumps to 1.50%: $4,500,000 × 0.015 = $67,500. And for a $10 million townhouse in Greenwich Village, you're looking at 3.25%: $10,000,000 × 0.0325 = $325,000.
One critical detail: the mansion tax applies to the total consideration, which includes any personal property bundled into the sale — furniture, fixtures, or appliances included in the contract price. The NYC Department of Finance looks at the total transfer amount, not just the real estate value. If you're considering neighborhoods in the $1M–$3M range, our guide to living in Gramercy covers one of the best-value areas in Manhattan right now.
I'll build you a personalized closing cost breakdown — including mansion tax, attorney fees, and building-specific costs — before you make an offer.
Start a ConversationUnder New York State law, the buyer (grantee) pays the mansion tax. This is different from the NYS transfer tax and NYC transfer tax, which are paid by the seller. The distinction matters because it means buyers at $1 million and above need to budget for this cost on top of their down payment and other closing expenses.
There is one exception worth noting: in new development purchases, many sponsors (developers) will negotiate to cover or credit back part of the mansion tax as a deal sweetener — especially in a buyer's market or for early-phase purchasers. This is more common than most buyers realize. In my experience, about 30–40% of new development transactions include some form of closing cost concession that may offset the mansion tax.
For resale transactions, the mansion tax is almost always the buyer's responsibility. That said, everything in NYC real estate is negotiable. If a seller is highly motivated, asking them to contribute toward closing costs — effectively splitting the mansion tax burden — is a legitimate negotiation strategy, particularly in a market with high inventory.
While you can't avoid the mansion tax entirely on a $1M+ purchase, experienced buyers and agents use several strategies to minimize the impact:
The most powerful strategy is price negotiation around bracket cliffs. Buying a property at $1,999,000 instead of $2,000,000 saves you $7,020 in mansion tax (1.00% vs. 1.25% rate). That single dollar of price reduction cuts your tax rate by 0.25% on the entire purchase. Work with your agent to identify properties where the asking price sits near a bracket threshold — sellers often prefer a slightly lower price if it closes the deal.
If the purchase includes furniture, custom fixtures, or appliances, structuring the contract with a separate personal property allocation can reduce the taxable consideration. For example, on a $1.1 million purchase that includes $50,000 worth of furniture, a separate bill of sale for the furniture could bring the real property below $1 million — potentially eliminating the mansion tax entirely. However, this must be done legitimately and at fair market value. The NYC Department of Finance scrutinizes unusually large personal property allocations.
In a slower market, ask the seller to provide a closing cost credit that offsets the mansion tax. This is especially effective in new development where sponsors have more flexibility in their pricing structure. If you're weighing the merits of new construction, our feature on 15 Hudson Yards illustrates the type of concessions available in premium new development.
The mansion tax is only one piece of the transfer tax picture in NYC. Buyers often confuse it with the NYS transfer tax and NYC transfer tax — but these are three separate levies, each paid by different parties.
| Tax | Who Pays | Rate | Threshold |
|---|---|---|---|
| NYC Mansion Tax | Buyer | 1% – 3.9% | $1M+ |
| NYS Transfer Tax | Seller | 0.4% (or 0.65% over $3M) | All sales |
| NYC Transfer Tax | Seller | 1% (or 1.425% over $500K) | All sales |
On a $2 million condo purchase, the total tax picture looks like this: the buyer pays $25,000 in mansion tax, while the seller pays approximately $8,000 in NYS transfer tax and $28,500 in NYC transfer tax. The combined government tax take on a single $2M transaction is over $61,500.
For co-op purchases, note that co-ops are technically share transfers, not real property transfers. The mansion tax still applies, but the NYS and NYC transfer taxes may be handled differently depending on how the building's proprietary lease is structured. Always confirm with your real estate agent and attorney how the taxes apply to your specific transaction.
In March 2026, Democrats in both the New York State Senate and Assembly introduced budget bills that would increase mansion tax rates on properties above $5 million. The proposed changes would add approximately 1.4 percentage points to current rates at the high end, with new rates including:
These proposals are not yet law and face significant opposition from the real estate industry. However, they signal an ongoing legislative appetite for higher transfer taxes on luxury properties. If you're considering a purchase above $5 million, the timing of your transaction could have a meaningful financial impact depending on whether these proposals advance.
New York has a history of expanding the mansion tax rather than contracting it. The original 1989 law was a flat 1% on everything above $1 million. The 2019 expansion added seven additional brackets. If the 2026 proposals pass, it would be the third major expansion in the tax's history — a trend worth considering for buyers in the ultra-luxury segment.
The mansion tax is paid at closing — it's due when the deed or shares are transferred. For condo purchases, it's filed with the NYC Department of Finance as part of the Real Property Transfer Tax return (Form RP-5217). For co-op purchases, the tax is paid through the co-op's managing agent or transfer agent.
Your real estate attorney handles the filing and payment, but you'll need to bring the funds to closing. The mansion tax is typically included in your closing cost estimate, which your attorney should provide well before the closing date. It cannot be financed into your mortgage — it must be paid out of pocket alongside your down payment.
In my experience, the biggest mistake buyers make is not budgeting for the mansion tax early enough. On a $2 million purchase, that's an additional $25,000 you need liquid at closing — on top of your 20% down payment, attorney fees, title insurance, and building fees. I always tell my clients to request a full closing cost estimate before they even start touring properties, so there are no surprises when it's time to sign.
No. The mansion tax is a separate tax paid by the buyer on purchases of $1 million or more. The NYS transfer tax and NYC transfer tax are paid by the seller. All three can apply to the same transaction, but they are different taxes with different rates, thresholds, and responsible parties.
Yes — if the total consideration (including any personal property) is below $1 million, no mansion tax is owed. Many buyers and agents negotiate prices to $999,999 specifically to avoid triggering the tax. However, this only works if the property's market value supports a sub-$1M price.
Yes. Even though co-op purchases are technically share transfers rather than real property transfers, the mansion tax applies to co-ops, condos, townhouses, and new development purchases in NYC. The $1 million threshold and bracket rates are the same regardless of property type.
The buyer pays the mansion tax on new construction, just like resale purchases. However, many developers offer closing cost concessions that can offset the mansion tax — especially during early sales phases or in a slower market. Always ask about sponsor incentives before signing a new development contract.
There is no active legislation to raise the $1 million threshold. In fact, the 2026 legislative proposals would increase rates on high-end properties rather than raise the entry point. Adjusted for inflation, the threshold would be approximately $2.67 million today — but politically, raising it has found little support in Albany.
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