List price is only the entry fee. In Manhattan condominium transactions, buyers should model cash-to-close separately for resales versus sponsor (new development) deals. Resale buyer closing costs often land around roughly 2–4% of purchase price; sponsor purchases frequently reach about 5–6% or more because transfer taxes are commonly shifted to the buyer in the offering plan and purchase agreement.
Mansion tax: buyer-paid, cliff-based
New York’s mansion tax applies to residential purchases of $1,000,000 or more. The buyer pays it. Critically, once a purchase crosses a tier threshold, the corresponding rate applies to the entire purchase price—not only the dollars above the threshold. That creates negotiation “dead zones” just under major cliffs.
| Purchase price | Illustrative mansion tax rate |
|---|---|
| $1M to under $2M | 1.00% |
| $2M to under $3M | 1.25% |
| $3M to under $5M | 1.50% |
| $5M to under $10M | 2.25% |
| $10M to under $15M | 3.25% |
| $15M to under $20M | 3.50% |
| $20M to under $25M | 3.75% |
| $25M+ | 3.90% |
Examples: a $1.5M condo may carry about $15,000 in mansion tax; a $5M purchase may carry about $112,500. Confirm current statutory rates with counsel before wiring funds—brackets and administration can be updated by legislation.
Transfer taxes: seller custom on resale, buyer often on sponsor deals
Separate from mansion tax, New York City and New York State levy real property transfer taxes on the conveyance.
- NYC RPTT (residential ≥ $500K): commonly 1.425% of consideration
- NYS transfer tax: generally 0.40%; residential sales above $3M typically add an additional base tax that lifts the combined transfer stack
- Combined NYC + NYS transfer taxes: often cited near ~1.825% at or below the $3M residential threshold and ~2.075% above it
On a typical Manhattan resale, the seller customarily pays transfer taxes. On a sponsor sale, the offering plan almost always requires the buyer to pay those transfer taxes plus the sponsor’s attorney fee. That single contractual shift is why new development cash-to-close feels punishing even when the sticker price looks competitive with a resale in Financial District or Midtown inventory.
Mortgage recording tax (financed condos)
Condo purchases create a mortgage recorded against real property. Buyers who finance generally pay New York City mortgage recording tax. For larger loans (commonly discussed around the $500,000+ band), effective rates are often cited near ~1.8–1.925% depending on loan size and credits. Co-op share loans are treated differently; this is one reason financed condo and co-op cost stacks diverge. See condo vs co-op.
Title insurance, attorneys, and building fees
Condo buyers also budget for:
- Owner’s and lender’s title insurance (often discussed near ~0.5–0.7% combined, varying by insurer and loan amount)
- Buyer’s attorney fees
- Title search, recording, and messenger/admin costs
- Managing agent / condominium transfer or move-in fees
- Bank appraisal, application, and bank counsel fees when financing
Worked comparison: $2M purchase
Illustrative only—your contract controls:
| Cost item | Typical resale buyer | Typical sponsor buyer |
|---|---|---|
| Mansion tax (1.25% at $2M tier) | ~$25,000 | ~$25,000 |
| NYC + NYS transfer taxes | Usually seller-paid | Often buyer-paid (~1.825%) |
| Title + attorney + fees | Buyer pays | Buyer pays (+ sponsor counsel) |
| Mortgage recording tax | If financing | If financing |
At $2M, transfer taxes alone can exceed $35,000 when shifted to the buyer—before mansion tax and lender costs. Always build a line-item spreadsheet before you bid.
Ongoing costs after closing (not closing costs, but must-know)
- Monthly common charges
- Separate property taxes (and abatement expiration risk)
- Special assessments for Local Law 11 / capital work
- Insurance deductibles and alteration deposits if renovating
Read more in Manhattan condo regulations buyers must know.
Buyer actions before you sign
- Ask counsel to extract every buyer-paid tax and fee from the contract and offering plan
- Model mansion-tax cliffs when negotiating near $1M, $2M, $3M, $5M, and higher tiers
- Compare all-in cash-to-close for a resale alternative before choosing new development
- If financing, lock a recording-tax estimate with your lender early
- Confirm whether any flip tax or building transfer fee exists (more common in co-ops, but check condo bylaws)
Frequently asked questions
Who pays the mansion tax?
The buyer, on residential purchases of $1M+.
Why are sponsor closing costs higher?
Because transfer taxes and sponsor legal fees are frequently contracted onto the buyer, stacked on top of mansion tax and title costs.
Disclaimer: Tax rates and customs summarized here are for education only and may change. This is not tax or legal advice. Confirm current law and your contract allocation with a New York attorney and tax professional. Manhattan Condos is a marketing platform, not a brokerage or tax advisor.