If you are selling your NYC home, you need to be aware of closing costs, particularly transfer taxes. They are your highest cost, typically after paying your listing agent’s commission. These taxes are levied both by New York State and New York City. So how much are transfer taxes, and do home sellers always have to pay them?

Brooklyn Homes Under $600K on StreetEasy Article continues below

Brighton Beach

1311 Brightwater Avenue

$575,000

1 |

1

Brighton Beach

313 Brightwater Court

$429,000

2 |

1

East New York

851 Glenmore Avenue

$589,000

Studio |

2

Brighton Beach

3392 Guider Avenue

$539,000

1 |

1

Homecrest

1877 East 12th Street

$420,000

2 |

1

Coney Island

2925 West 5th Street

$349,000

1 |

1

Fort Hamilton

8942 Colonial Road

$429,000

1 |

1

Bath Beach

304 Bay 17th Street

$295,000

1 |

1

Sheepshead Bay

2475 East 11th Street

$338,000

1 |

1

Crown Heights

773 Eastern Parkway

$349,000

1 |

1

Homecrest

2234 Ocean Avenue

$288,000

1 |

1

Homecrest

1495 East 28th Street

$585,000

2 |

2

When Is the NYC Transfer Tax Applied?

The NYC transfer tax, formally known as the Real Property Transfer Tax (RPTT), must be paid whenever real estate transfers between two parties. It applies to all residential properties in NYC worth over $25,000, including townhouses, condos, and co-ops. Outside of NYC, a statewide transfer tax applies.

“There’s no distinction between condos, co-ops, or townhouses,” says Brian Babst of Compass. “Transfer tax is paid by sellers in almost all instances — with the possible exception of new developments (more on that shortly), where the buyer traditionally pays it.”

What About Flip Tax?

For sellers in certain co-ops, the so-called flip tax can be larger than the transfer tax. A flip tax can range from a modest $500 to 15% or more of the sales price. Higher flip taxes arise in buildings that were previously income-restricted HDFC apartments. If the owners are now permitted to sell their shares for fair market value, they’re likely making a huge profit. Hence, the co-op feels entitled to share in this money via a flip tax. However, you will not see these fees in all co-op buildings, and you will never see them in condo buildings.

How Much Are the NYC and NY State Transfer Taxes?

The New York City transfer tax sits at 1% of the sales price for homes worth $500,000 or less. For homes with sales prices over $500,000, the tax is 1.425%.

You will also be subject to New York State transfer taxes, which is 0.4% of the sales price for properties below $3 million, and 0.65% for properties over $3 million. 

For example, if a property sells for $499,999 or less, the combined total transfer tax is 1.4%. If the property cost more than $500,000, the total transfer tax is 1.825 to 2.075%, depending on the price.

Are you selling a home for $ 1 million or more? You will also have to pay a mansion tax.

Manhattan Homes Under $600K on StreetEasy Article continues below

Turtle Bay

310 East 49th Street

$460,000

Studio |

1

Hell’s Kitchen

500 West 43rd Street

$535,000

Studio |

1

Yorkville

1725 York Avenue

$585,000

1 |

1

Murray Hill

25 Tudor City Place

$465,000

1 |

1

Kips Bay

311 East 25th Street

$305,000

Studio |

1

Hell’s Kitchen

325 West 45th Street

$525,000

1 |

1

Washington Heights

801 Riverside Drive

$545,000

1 |

1

Midtown

100 West 57th Street

$239,000

2 |

2

Hell’s Kitchen

715 Ninth Avenue

$415,000

2 |

1

Greenwich Village

24 Fifth Avenue

$495,000

Studio |

1

South Harlem

157 West 123rd Street

$310,000

1 |

1

Gramercy Park

235 East 22nd Street

$399,000

Studio |

1

Examples of Transfer Tax Costs

Selling for $425K

Imagine you were selling a studio on the Upper East Side for $425,000. Because the sales price is below $499,999, the total transfer tax rate would be 1.4%. It’s the sum of the New York state transfer tax (0.4%) and the NYC transfer tax (1%). The total amount of transfer tax owed is $5,950 ($425,000 x 1.4%).

Selling for $2.4M

If you were selling a 2-bedroom loft in Tribeca for $2,400,000, you would be paying a transfer tax of 1.825%, as the sales price is above $500,000. Based on the sales price, the total transfer tax would be $43,800 ($2,400,000 x 1.825%).

Selling for $5M

If you sold a $5M property in Gramercy Park, you would pay a total transfer tax of 2.075%, which would cost you $103,750 (1.425% for NYC and 0.65% for NYS).

Queens Homes Under $600K on StreetEasy Article continues below

Woodside

41-35 67th Street

$408,000

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1

Jackson Heights

88-11 34th Avenue

$388,000

1 |

1

Elmhurst

83-37 Saint James Avenue

$315,000

1 |

1

Jamaica

175-45 88th Avenue

$170,000

1 |

1

Jackson Heights

35-16 85th Street

$420,000

1 |

1

Elmhurst

84-25 Elmhurst Avenue

$575,000

2 |

1

Arverne

69-20 Almeda Avenue

$550,000

3 |

1

Rego Park

61-25 97th Street

$329,000

1 |

1

Rego Park

65-65 Wetherole Street

$318,000

1 |

1

Corona

106-21 50th Avenue

$480,000

2 |

1

Astoria

21-66 33 Road

$529,000

2 |

1

Rego Park

65-38 Booth Street

$204,888

1 |

1

Who Pays Transfer Taxes in NYC?

Generally speaking, in NYC, the seller covers the transfer tax. 

However, there is one crucial caveat. If you buy a sponsor unit in a new development property, you might be asked to pay the transfer tax. However, sometimes developers will pick up the tab as a point of negotiation, depending on market conditions and how quickly a developer needs to move the unit. 

“In recent years, with the flood of excess new development inventory, developers have been eating this cost in a way that they didn’t traditionally,” Babst explains. Additionally, if a buyer is paying the transfer tax, they cannot finance its cost. They need to have this cash available at closing.

To summarize, buying and selling property in NYC incurs numerous fees and taxes. Speak with a broker and a real estate attorney about all the closing costs involved to get an accurate understanding of what you’ll need to pay.