What is the New York State Mansion Tax?
WHAT IS THE MANSION TAX?
The New York State Mansion Tax is a transfer tax for residential property purchases in excess of $1 million. Applicable to any property that may be used in whole or in part as a personal residence, this includes condos, co-ops, and one-to-three-family houses. The Tax must be paid within 15 days of closing and is therefore typically paid at the closing table.
HOW MUCH IS THE MANSION TAX?
Originally instituted by Governor Mario Cuomo in 1989 at a flat rate of 1%, the Mansion Tax remained unchanged for more than 30 years. In the 2020 State Budget, it was transitioned to a progressive tax, with rates ranging from 1% to 3.9%, depending on the purchase price:
WHO PAYS THE TAX, AND CAN IT BE AVOIDED?
The New York State Mansion Tax is typically paid by the buyer or grantee (a person who obtains real estate property as a result of a conveyance). It can be paid by the seller if agreed upon in the contract terms, though this is less common.
If the buyer doesn’t pay the tax or is exempt, the seller or grantor (a person who transfers real estate property via a conveyance) must pay instead. If the tax becomes the seller's burden due to the buyer’s failure to pay, it is deemed the joint and several liability of both the seller and buyer.
Related Articles
What is a NYS Disclosure Form for Buyer and Seller?
There are two types of Agency disclosure forms in New York, one addressing the agent’s fiduciary relationship to the Landlord and Tenant in a rental transaction, and another for their relationship to a Buyer and Seller in sales transactions. Each ...What is a NYS Disclosure Form for Landlord and Tenant?
There are two types of Agency disclosure forms in New York, one addressing the agent’s fiduciary relationship to the Landlord and Tenant in a rental transaction, and another for their relationship to a Buyer and Seller in sales transactions. Each ...What Are the Differences Between a Co-Op and a Condo?
Key Takeaways CO-OP Stricter subletting rules disincentivize the use of the property for investment purposes Higher monthly maintenance fees since the buildings outstanding mortgage and property taxes are included Subject to a flip tax The board ...What Are the Steps to Subletting a Lease?
1. Review Your Lease Like most people, you probably haven’t read over your lease since signing it, so take another thorough look over its terms. Some landlords and management companies require you to find a new tenant yourself, others stipulate a ...What Are the Steps to Closing On a NYC Apartment After an Offer is Accepted?
1. REVIEW CONTRACT & DUE DILIGENCE MATERIALS After your offer is accepted, your attorney will review the contract sent by the seller’s attorney. Next, they will evaluate any due diligence materials for the building and unit including Board meeting ...