New York City real estate transfers are subject to both the New York State transfer tax and the NYC Real Property Transfer Tax (RPTT). The NYS tax is 0.40% for most sales, increasing to 0.65% for residential properties over $3,000,000 or commercial properties over $2,000,000. The NYC RPTT is 1.00% for residential sales up to $500,000, or 1.425% over $500,000. Commercial properties pay 1.425% up to $500,000 or 2.625% over $500,000. Both taxes are generally paid by the seller.
In New York City, both the NYS transfer tax and the NYC RPTT are customarily paid by the seller at closing. In new development transactions, the buyer may be required to pay the transfer taxes by contract. For properties sold for over $1,000,000, the buyer also pays a 1% mansion tax. Buyers and sellers should confirm their responsibilities with a New York real estate attorney or title company.
Certain New York City real estate transactions may qualify for exemptions from the transfer taxes. Common exemptions include transfers with consideration of $500 or less, transfers to qualifying governmental entities, certain cooperative apartment transactions, and transfers pursuant to a divorce or separation agreement. The mansion tax exemption may apply to certain qualifying affordable housing transactions. Consult a New York real estate attorney to determine whether your transaction qualifies for any exemptions.