Is a West Village apartment on your shortlist, but the “mansion tax” has you second‑guessing the numbers? You’re not alone. Many buyers discover this state transfer tax only after they start running real closing costs. The good news: once you understand how it works, you can plan for it confidently and avoid surprises. Let’s dive in.
What the mansion tax is
New York State’s mansion tax is an additional transfer tax that applies when the purchase price is $1,000,000 or more. The buyer typically pays this tax at closing. It is separate from any New York City transfer tax, mortgage recording tax, and standard closing fees.
The tax can apply to both condos and co‑ops in New York City. For co‑ops, the purchase is treated as a transfer of shares and a proprietary lease. If the consideration meets the threshold, the mansion tax may be due.
For official rules and current guidance, review the New York State Department of Taxation and Finance’s information on real estate transfer taxes. You can start with the department’s overview and rate guidance on the New York State site.
- Learn more from the New York State Department of Taxation and Finance at their real estate transfer tax page: NYS real estate transfer taxes.
Current rates and how to calculate
New York uses a graduated rate schedule for residential purchases at $1,000,000 or more. You apply a single rate to the full purchase price based on the bracket.
- $1,000,000 to less than $2,000,000: 1.00%
- $2,000,000 to less than $3,000,000: 1.25%
- $3,000,000 to less than $5,000,000: 1.50%
- $5,000,000 to less than $10,000,000: 2.25%
- $10,000,000 to less than $15,000,000: 3.25%
- $15,000,000 to less than $20,000,000: 3.50%
- $20,000,000 and up: 3.90%
How to compute it:
- Find the purchase price.
- Identify the bracket and rate.
- Multiply the full purchase price by that rate.
Quick West Village examples
- $1,050,000 purchase at 1.00% → $10,500
- $2,250,000 purchase at 1.25% → $28,125
- $4,500,000 purchase at 1.50% → $67,500
- $7,500,000 purchase at 2.25% → $168,750
- $12,000,000 purchase at 3.25% → $390,000
Because so many West Village condos and higher‑end co‑ops trade above $1,000,000, this tax is common in the neighborhood. Always verify the current brackets on the New York State site before you finalize numbers.
Where the mansion tax fits in your closing costs
Think about your total cash at closing as several buckets. A simple way to model it:
- Down payment
- Mansion tax
- Lender‑required cash (reserves and escrows)
- Mortgage recording tax if you are financing a condo or townhouse
- New York City transfer tax
- Closing fees (attorney, title for condos, bank and processing fees, appraisal, inspection)
- Prepaids and building escrows (common charges, property taxes, reserve deposits)
In New York City, there are separate local taxes in addition to the state mansion tax. Review the city’s rules directly:
- For the city transfer tax, see the NYC Department of Finance page on the Real Property Transfer Tax.
- If you will have a mortgage on a condo or townhouse, check NYC’s page on the Mortgage Recording Tax and confirm the rate and calculation with your lender.
Sample condo scenario
Illustration only. Numbers vary by lender, building, and loan structure.
- Purchase price: $3,000,000 condo
- Down payment: 20% → $600,000
- Mansion tax: 1.50% → $45,000
- Closing and lender fees: estimate $8,000 to $20,000
- Prepaids and escrows: estimate $3,000 to $10,000
Approximate cash at closing: $600,000 + $45,000 + fees and escrows (for example, around $20,000) ≈ $665,000. If you are financing, your lender will also advise you on mortgage recording tax and how it affects the total.
Sample co‑op scenario
Illustration only. Co‑op policies vary by building and board.
- Purchase price: $1,750,000 co‑op
- Down payment: assume 40% → $700,000
- Mansion tax: 1.00% → $17,500
- Closing and lender fees: varies; co‑ops typically do not involve title insurance the same way condos do
- Prepaids and board fees: varies by building; some buildings have transfer or move‑in charges
Approximate cash at closing is driven mainly by the down payment plus the mansion tax and building‑specific fees. Confirm building policies, any flip tax obligations, and how the contract allocates costs before you finalize your cash plan.
Condo vs. co‑op: what changes
- Ownership and process. A condo is real property, so closings typically include title insurance along with state and city transfer taxes. A co‑op is a transfer of shares and a proprietary lease. Co‑ops can still trigger the mansion tax when the consideration is $1,000,000 or more.
- Down payments. Co‑op boards often require larger down payments, sometimes 40 to 50 percent, which increases cash at closing. Condos may allow smaller down payments, depending on your lender and program.
- Board and building policies. Co‑ops can have flip taxes or transfer fees that influence net proceeds and negotiation. Condos and co‑ops both have move‑in and application fees that you should include in your model.
- Financing flexibility. Some condo loan programs allow more flexibility around rolling certain costs. Co‑op share loans may be more restrictive. Always confirm with your mortgage officer whether any part of the mansion tax or other fees can be financed.
Planning and negotiation tips
- Ask for an itemized estimate early. Request a draft closing statement from your attorney or lender so you can see the mansion tax as a separate line.
- Confirm lender policy. Ask your mortgage officer whether the mansion tax or any closing costs can be financed or must be paid in cash at closing.
- Mind the threshold. A small price difference around $1,000,000 can change whether the tax applies. If you are negotiating near that line, discuss strategy with your attorney.
- Verify city taxes. In NYC, the city transfer tax and mortgage recording tax can be significant alongside the state mansion tax. Confirm both with your attorney and lender.
West Village takeaways
If you are shopping in the West Village, expect the mansion tax to factor into many condo purchases and a portion of co‑ops. The rates are straightforward once you place your purchase price in the correct bracket, and a clear cash‑at‑closing model helps you compare homes apples to apples. With good preparation and the right team, you can plan for the tax and move ahead with confidence.
Connect with Jane for a tailored affordability plan to estimate your total cash at closing, including mansion tax and lender requirements. When you are ready, bring your lender pre‑approval and a specific property so we can create a customized estimate and timeline. To get started, reach out to The Jane Advisory.
This guide is for general informational purposes only. It is not tax or legal advice. Always consult your attorney, accountant, and lender for advice specific to your situation.
FAQs
Who pays the New York mansion tax on a West Village purchase?
- The buyer generally pays the state mansion tax at closing, subject to contract terms and final closing statements.
Does the mansion tax apply to West Village co‑ops as well as condos?
- Yes, co‑op share transfers can trigger the mansion tax when the consideration is $1,000,000 or more; confirm specifics with your attorney.
How do I calculate the mansion tax on a $2,250,000 West Village home?
- At 1.25 percent, multiply $2,250,000 by 0.0125 to get $28,125, then confirm the current bracket with New York State.
What other NYC taxes should I expect besides the mansion tax?
- New York City’s Real Property Transfer Tax applies to most residential purchases, and the Mortgage Recording Tax applies if you finance a condo or townhouse; confirm rates with NYC DOF and your lender.
Can I finance the mansion tax into my loan on a West Village purchase?
- Sometimes, depending on lender policy and your loan program; ask your mortgage officer early so you can plan your cash at closing.
Is the mansion tax deductible for income taxes?
- Treatment varies and depends on your personal tax situation; consult a qualified tax professional for guidance.
