If you're buying or selling a home in New York City for $1 million or more, the mansion tax is one of the largest single closing costs in the deal, and one of the most misunderstood. It isn't limited to actual mansions: it applies to a Queens co-op, a Brooklyn condo, or a one-family house in any borough, the moment the price hits seven figures.13
This guide walks through the original statewide mansion tax enacted in 1989, the separate supplemental tax New York City added on top of it in 2019, exactly who is legally required to pay each one, how the rules apply differently to co-op share purchases than to condos and houses, and how these buyer-side taxes fit alongside the New York State and New York City transfer taxes that sellers pay at the same closing.1236 A set of worked examples at several price points, using only the published rates, shows how the tax actually adds up.
These are current, published rates as of this writing, but tax law changes, and a bill pending in the state legislature would raise the threshold and index it to inflation for the first time. Treat every figure here as a snapshot of the rule as currently in effect, and confirm current numbers with your closing attorney before you rely on them.7
This article focuses on the mansion tax itself; the sections below link out to the full breakdown of a seller's closing costs and the separate tax on new mortgages.
What Is the NYC Mansion Tax?
New York's "mansion tax" is an additional real estate transfer tax imposed on each conveyance of New York real property that is or may be used in whole or in part as a personal residence, when the consideration for the entire conveyance is $1 million or more.3 It was originally enacted in 1989, under Governor Mario Cuomo, as a flat 1% tax on the purchase price of properties selling above that $1 million line, and it applied statewide, not just in New York City.6
The tax is computed at a rate of 1% of the consideration, or the part of the consideration attributable to the residential real property, and it is legally the buyer's (grantee's) responsibility to pay.23 "Residential real property" for purposes of this tax specifically includes a one-, two-, or three-family house, an individual condominium unit, or a cooperative apartment unit, so the tax reaches co-ops and condos exactly the same way it reaches a house.23
Despite the nickname, the $1 million threshold has never been unique to luxury property. A one-bedroom condo or a two-bedroom co-op anywhere in Queens, Brooklyn, or Manhattan that happens to sell for $1 million or more owes the same 1% base tax as an actual mansion.23
The 2019 Supplemental Tax and NYC's Rate Table
In 2019, New York's Enacted Budget (Chapter 59 of 2019) left the statewide 1% mansion tax in place and layered a separate, progressive supplemental tax on top of it, but only for residential conveyances located in New York City where the consideration is $2,000,000 or more.2 The supplemental tax took effect July 1, 2019, and applies in addition to, not instead of, the 1% mansion tax.2
The supplemental tax rate is not a flat percentage; it rises in seven tiers based on the entire price of the conveyance, from a quarter of one percent at the $2 million entry point up to nearly 3% at the very top of the market.2
| Entire conveyance amount | Supplemental tax rate |
|---|---|
| At least $2 million but less than $3 million | 0.25%2 |
| At least $3 million but less than $5 million | 0.5%2 |
| At least $5 million but less than $10 million | 1.25%2 |
| At least $10 million but less than $15 million | 2.25%2 |
| At least $15 million but less than $20 million | 2.5%2 |
| At least $20 million but less than $25 million | 2.75%2 |
| $25 million or more | 2.9%2 |
Add the 1% base mansion tax to the top 2.9% supplemental tier and a New York City buyer at $25 million or more owes a combined 3.9% in mansion-related tax alone, before the base and additional transfer taxes the seller separately owes on the same closing.12
Outside New York City, none of this supplemental tax applies. A home in Nassau County, Westchester, or anywhere else in the state above $1 million still owes only the original flat 1% mansion tax.12
Who Legally Pays, and How It Gets Negotiated
Both the base mansion tax and the NYC supplemental tax are, by law, the buyer's (grantee's) obligation.23 If the buyer fails to pay, or is exempt, the seller (grantor) becomes responsible for it, and at that point the tax becomes the joint and several liability of both parties.2
In practice, who actually writes the check at closing is often negotiated, particularly on new-development (sponsor) sales and in slower markets. Brokers reporting on New York City closing credits have documented sponsors agreeing to cover the mansion tax and transfer taxes as an incentive: in one $2.5 million Brooklyn condo deal, the sponsor covered the city and state transfer taxes while the buyer still paid the mansion tax, described as a credit worth roughly 3 to 4% of the asking price, and in an $8.5 million Manhattan condo deal, the sponsor paid the mansion tax on top of the transfer taxes.5
The mansion tax is a flat percentage of the entire price once you cross a threshold, not a marginal tax, so a single extra dollar of price can trigger thousands of dollars more in tax.
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Co-ops vs. Condos and Houses
The statute defines residential real property to include "a one, two, or three-family house, an individual condominium unit, or a cooperative apartment unit," so a co-op share purchase owes the mansion tax under the identical 1% rate (and the NYC supplemental tax, where it applies) as a condo or a house at the same price.32 There is no separate, lower threshold or reduced rate for co-ops.23
Where co-ops differ is in how multiple purchases are treated. When a buyer or seller conveys more than one unit at once, the state treats those transfers as a single conveyance, with the considerations added together, only when the units are used in conjunction with each other or have a clear relationship, such as an apartment sold together with a storage unit and a parking spot in the same building.2 Separate, unconnected co-op apartments sold to different buyers do not get combined this way. In one published state example, a seller conveyed four unconnected cooperative apartments in the same building, two priced at $1 million each and two at $1.5 million each; because the units were not used together, each sale was treated as its own conveyance, and the buyer of each apartment paid the 1% mansion tax on that unit's own price rather than the tax being calculated on the combined $5 million total.2
Practically, that means a co-op buyer at exactly $1 million or above owes the same mansion tax a condo buyer at that price owes23, but a co-op board's financial requirements, flip taxes set by the building itself, and the shares-of-stock structure of ownership are separate from, and layered on top of, this state and city tax. For a full side-by-side of how co-op and condo transactions differ beyond tax treatment, see selling a co-op vs. a condo in NYC.
How the Mansion Tax Fits Alongside NYS and NYC Transfer Taxes
The mansion tax and NYC supplemental tax are buyer-paid taxes, but they are only part of the tax due at closing on a New York City sale. Separately, the seller generally owes the base New York State real estate transfer tax, computed at $2 for each $500 of consideration, or 0.4%, on essentially every conveyance over $500.12 In New York City, the 2019 budget also added an "additional base tax" of $1.25 per $500, or 0.25%, paid by the seller, on residential conveyances of $3 million or more (and on mixed-use property valued in the same way).2
Put together on a single $7 million New York City condo sale, the state's own published example shows the seller owing $28,000 in base tax plus $17,500 in additional base tax, for $45,500 total, while the buyer separately owes $70,000 in mansion tax plus $87,500 in supplemental tax, for $157,500 total, a combined $203,000 in transfer-related tax on one closing, split by statute between the two sides.2
Because the seller's base and additional base tax obligations are a large piece of a seller's total closing costs alongside broker commissions, attorney fees, and other charges, that full picture, rather than the buyer-focused mansion tax covered here, is worked through in detail in what it costs to sell a home in NYC. Buyers financing part of the purchase also owe a separate tax on the mortgage itself, covered in the mortgage recording tax guide.
Worked Examples at Several Price Points
These examples use only the published statewide and NYC rates above and assume a straightforward, fully residential purchase with no mixed-use complications.
- A house or co-op anywhere in New York State at $999,999: no mansion tax at all, because the consideration is below the $1 million threshold.3
- A house or co-op anywhere in New York State, including NYC, at exactly $1,000,000: 1% mansion tax on the full price, or $10,000, and no NYC supplemental tax because the price is below the $2 million supplemental threshold.23
- A Queens condo at $1,500,000: 1% mansion tax on the full price, or $15,000; still no NYC supplemental tax, since it only applies at $2,000,000 and above.23
- A Brooklyn condo at $2,500,000: 1% mansion tax, or $25,000, plus the NYC supplemental tax at the $2 million to $3 million tier of 0.25%, or $6,250, for combined buyer-side tax of $31,250.2
- A Manhattan co-op at $7,000,000: 1% mansion tax, or $70,000, plus the supplemental tax at the $5 million to $10 million tier of 1.25%, or $87,500, for combined buyer-side tax of $157,500, matching the state's own published worked example at this price.2
- A townhouse at $30,000,000: 1% mansion tax, or $300,000, plus the supplemental tax at the top tier of 2.9% for conveyances of $25 million or more, or $870,000, for combined buyer-side tax of $1,170,000, a 3.9% effective rate on the total price.2
If you're trying to work out where your own purchase or sale falls relative to these brackets, get a current value estimate for your home before you run the numbers.
Common Misconceptions About the Mansion Tax
It only applies to actual mansions. It applies to any residential conveyance, including a studio co-op, once the price reaches $1 million, statewide.32
It works like an income tax bracket, taxing only the amount above the threshold. It does not. The mansion tax and the NYC supplemental tax are both computed on the entire consideration once a price crosses into a given tier, not just the portion above the line.2 That creates a real cliff at each threshold.
It's a New York City tax. The base 1% mansion tax is a New York State tax that applies anywhere in the state; only the additional supplemental tax and additional base tax are New York City-specific, and only above their own $2 million and $3 million thresholds.12
The $1 million threshold rises with inflation. It hasn't moved since 1989, when it was first enacted at $1 million.6 A bill introduced in the state legislature, A2626, would raise the threshold to $2 million and add an automatic annual inflation adjustment using the Consumer Price Index starting in 2027, but as of this writing the bill remains in committee and is not law.7
What's Changed for 2026, and What Hasn't
The mansion tax and NYC supplemental tax rates and brackets described above have not changed since they took effect on July 1, 2019; there has been no rate change or new bracket added for 2026.2 Proposed legislation such as Assembly Bill A2626, which would raise the $1 million threshold to $2 million and index it to inflation going forward, has been introduced but had not been enacted as of this writing, remaining in the Assembly's Ways and Means Committee.7
What did change for 2026 is a separate, unrelated tax: New York's 2026-2027 enacted budget created a new annual "pied-à-terre" surcharge on New York City residential property that does not serve as its owner's primary residence, covering one-, two-, and three-family homes valued over $5 million and condo or co-op units valued over $1 million.4 That surcharge takes effect July 1, 2026, and is a recurring yearly charge on qualifying non-primary residences, not a one-time tax paid at the moment of sale, so it is a different tax from the mansion tax covered in this guide, even though both target higher-value New York City residential property.4
Frequently Asked Questions
Does the mansion tax apply outside New York City?
Yes. The base 1% mansion tax is a statewide New York tax on any residential conveyance of $1 million or more; only the additional NYC supplemental tax and additional base tax, which apply above $2 million and $3 million respectively, are limited to New York City.132
Is the mansion tax a one-time closing cost or does it recur every year?
It's a one-time tax due within 15 days of the conveyance, paid through the closing process on Form TP-584-NYC in New York City.2 It's different from New York's new pied-à-terre surcharge, which is a recurring annual tax on qualifying non-primary NYC residences starting July 1, 2026.4
Do co-op purchases owe the mansion tax the same way condos do?
Yes. New York's residential real property definition for this tax explicitly includes "a cooperative apartment unit" alongside condominium units and one-, two-, or three-family houses, so a co-op share purchase at $1 million or more owes the same 1% (and, in NYC, the same supplemental tax) as a condo at the same price.32
Can the seller pay the mansion tax instead of the buyer?
Legally, the buyer owes it, and the seller only becomes liable if the buyer fails to pay or is exempt.23 In practice, sellers and sponsors sometimes agree to cover it as a negotiated closing credit, especially on new-development sales or in a slower market, but that's a contract term, not a change in who the state holds responsible.52
What actually happens if my sale price lands right at $1,000,000 or right at $2,000,000 in NYC?
Both thresholds work as a cliff, not a phase-in. At $1,000,000 or more, the entire price is taxed at 1%; below it, none of it is. In New York City, at $2,000,000 or more, the NYC supplemental tax applies to the entire price at that bracket's rate; one dollar below $2,000,000, it doesn't apply at all.2
Is a change to the mansion tax threshold coming in 2026 or 2027?
Not yet enacted. Assembly Bill A2626 would raise the threshold from $1 million to $2 million and add annual inflation indexing starting in 2027, but as of this writing it remains in the Assembly Ways and Means Committee and is not current law.7
How much combined tax is due on a $7 million NYC sale, counting both the buyer's and seller's transfer taxes?
Using the state's own published example, the buyer owes $70,000 in mansion tax plus $87,500 in NYC supplemental tax, for $157,500 total, while the seller separately owes $28,000 in base transfer tax plus $17,500 in NYC additional base tax, for $45,500 total, a combined $203,000 in transfer-related tax on that one closing.2
