The New York City mansion tax is paid by the buyer, starts at residential purchases of $1 million, and runs from 1% to 3.9% depending on price. On a $1.5 million apartment it is $15,000, due in cash at closing.
Two things about it surprise people, and both are expensive. The rate applies to the entire purchase price rather than the amount above the threshold. And the brackets are cliffs, not steps, so a single dollar over a boundary can cost tens of thousands.
The 2026 rate brackets
What people call the mansion tax is really two taxes stacked together: the statewide 1% tax under Tax Law § 1402-a, which applies to residential purchases of $1 million or more anywhere in New York, plus a supplemental tax under § 1402-b that applies only in cities of a million or more people — in practice, New York City. Combined, the rates are:
- 1% — $1,000,000 to $1,999,999
- 1.25% — $2,000,000 to $2,999,999
- 1.5% — $3,000,000 to $4,999,999
- 2.25% — $5,000,000 to $9,999,999
- 3.25% — $10,000,000 to $14,999,999
- 3.5% — $15,000,000 to $19,999,999
- 3.75% — $20,000,000 to $24,999,999
- 3.9% — $25,000,000 and above
Below $1 million there is no mansion tax at all. Outside New York City, the supplemental brackets don’t apply and the original flat 1% is the whole story.
The rate applies to the whole price
This is the most common misunderstanding, and it is not how income tax brackets work.
The price decides which rate applies. That rate is then charged on the entire consideration. A $1.5 million purchase is not taxed on the $500,000 above the threshold; it is taxed 1% on the full $1.5 million, or $15,000. A $5 million purchase is taxed 2.25% on the whole $5 million, or $112,500.
Where the cliffs are
Because the rate hits the full price, every bracket boundary is a cliff. One dollar more can move the entire purchase into a higher rate:
- $1,999,999 pays about $20,000. $2,000,000 pays $25,000. One dollar costs $5,000.
- $2,999,999 pays about $37,500. $3,000,000 pays $45,000.
- $9,999,999 pays about $225,000. $10,000,000 pays $325,000. One dollar costs $100,000.
Who pays it
The buyer, at closing, typically by certified check or wire alongside the rest of the closing funds. Your attorney handles the filings — Form TP-584 for the state and Form NYC-RPT for the city.
There is an exception worth knowing. Under § 1402-a, if the buyer fails to pay the tax or is exempt from it, the duty to pay shifts to the seller, and where the buyer simply failed to pay, the liability is joint and several. Sellers should not assume the mansion tax is purely the other side’s problem.
The tax applies to residential property: one-, two- and three-family houses, condominium units and co-op apartments. Commercial property is taxed under a different structure.
What counts toward the threshold
Consideration is the price you agree to pay the seller for the property. Your closing costs, broker commission and lender fees are not part of it, so a $999,000 purchase does not become taxable because the total cash you bring to closing exceeds $1 million.
New development is the exception to watch. In many sponsor sales the contract requires the buyer to pay the seller’s transfer taxes, and when that happens those taxes are treated as additional consideration. That can push a purchase priced just under a threshold over it, and it is one reason a sponsor contract deserves a close read before signing.
How New Jersey compares
The two states now work in opposite directions. In New York the buyer pays the mansion tax. In New Jersey, since July 10, 2025, the mansion tax is paid by the seller, on a graduated scale from 1% to 3.5%.
If you are weighing a purchase on both sides of the Hudson, that difference changes who absorbs the cost and how you should price an offer. It is also why guidance written before mid-2025 about New Jersey is now backwards.
Frequently asked questions
How much is the mansion tax in NYC?
It ranges from 1% to 3.9% of the full purchase price, based on the price bracket: 1% from $1,000,000 to $1,999,999, 1.25% to $2,999,999, 1.5% to $4,999,999, 2.25% to $9,999,999, 3.25% to $14,999,999, 3.5% to $19,999,999, 3.75% to $24,999,999, and 3.9% at $25,000,000 and above.
Who pays the mansion tax in New York?
The buyer pays it at closing. If the buyer is exempt or fails to pay, the duty shifts to the seller under Tax Law § 1402-a, and where the buyer simply failed to pay, both parties are jointly and severally liable.
Is the mansion tax only charged on the amount above $1 million?
No. The price bracket determines the rate, and that rate applies to the entire purchase price. A $1.5 million purchase is taxed 1% on the full $1.5 million, which is $15,000, not 1% of the $500,000 above the threshold.
What happens if I buy one dollar over a bracket?
The higher rate applies to the whole price, so the brackets are cliffs rather than steps. A $2,000,000 purchase pays $25,000 while a $1,999,999 purchase pays about $20,000, and at the $10 million boundary one dollar adds roughly $100,000.
Does the mansion tax apply to co-ops?
Yes. It applies to residential property generally, including co-op apartments, condominium units, and one- to three-family houses. Commercial property falls under a different tax structure.
Does the mansion tax apply outside New York City?
The original 1% mansion tax applies to residential purchases of $1 million or more anywhere in New York State. The higher progressive brackets come from a supplemental tax that applies only in cities of a million or more people, which in practice means New York City, so outside the city the flat 1% applies.