NY City and State Transfer Taxes

Seller pays.

Yes, Seller pays and must bring forms to closing. Checks to pay the taxes are cut out of closing funds due to the seller. Forms have to be signed by buyer and seller. Just use a service called ACRIS - they will help you prepare all the forms and file them for you.

Buyer pays transfer taxes in a new development, then pays them again when they sell.

why the heck would anyone buy a new development now, knowing they get hit coming and going on the transfer taxes?

It's just one more piece in the transaction cost pie. New dev closing costs are usually a bit over 5% for the buyer. Then it's over 6% on the way out as a seller between closing costs and broker fees. So if you buy a new dev and want to sell it the next day the sale price has to be at least 12% higher just to break even. Let any time elapse and you've interest + opportunity cost. If you have multiple asset classes available for investment it only makes sense to go into housing when prices are rising and you're leveraged. Most of the cash return on these investments comes from the fact that they are typically highly leveraged (10-20% equity). If I had 2 million in excess cash I'd put it in a hedge fund way before a house.