The NYC Mansion Tax: Full Bracket Table and How It Actually Works

The "mansion tax" is a buyer-paid tax on residential real estate sales in New York State of $1,000,000 or more. In NYC, it stacks on top of the original 1% state mansion tax, ranging from 1.0% on a $1M sale up to 3.9% on $25M+ sales. It is a cliff tax — cross a bracket by even one dollar and the new rate applies to the whole purchase price. Plan accordingly when you're near a threshold.

The full bracket table

Under $1,000,000: 0%, no tax. $1,000,000 to $1,999,999: 1.00% ($10,000 to $19,999). $2,000,000 to $2,999,999: 1.25% ($25,000 to $37,499). $3,000,000 to $4,999,999: 1.50% ($45,000 to $74,999). $5,000,000 to $9,999,999: 2.25% ($112,500 to $224,999). $10,000,000 to $14,999,999: 3.25% ($325,000 to $487,499). $15,000,000 to $19,999,999: 3.50% ($525,000 to $699,999). $20,000,000 to $24,999,999: 3.75% ($750,000 to $937,499). $25,000,000 and above: 3.90% ($975,000+). The 1.00% bracket is the original statewide mansion tax that's been on the books since 1989. Everything above it (the additional 0.25%, 0.50%, 1.25%, etc.) is the New York City additional tax that was layered on in 2019. The structure is set in state law; rates haven't changed since 2019.

Who pays it, when it applies, and the cliff problem

The buyer pays it. The check goes to the New York State Department of Taxation and Finance, filed via the TP-584 form at closing along with the deed (for condos and houses) or the assignment of stock and lease (for co-ops). Your attorney handles the filing. The tax applies to residential real estate at $1,000,000 or more — co-ops, condos, single-family homes, 2-3 family homes, some mixed-use properties (proportional). It does not apply to commercial real estate, vacant land, or transfers between spouses. The trigger is the purchase price, not the assessed value. Mansion tax brackets are not phase-ins, they're cliffs. Crossing a threshold by one dollar changes the rate on the entire purchase price. A $1,999,999 sale: 1.00% × $1,999,999 = $19,999.99 in mansion tax. A $2,000,000 sale: 1.25% × $2,000,000 = $25,000 in mansion tax. That's an extra $5,000 of tax for $1 of price. This is why offers cluster at $1,995,000 instead of $2,000,000, and at $4,995,000 instead of $5,000,000.

Threshold-planning tactics and worked examples

Legitimate moves to manage thresholds: negotiate just below the line (most common, works when the seller has room to move), separate fixtures and personal property (a buyer can sometimes structure part of the price as a separate bill of sale for furniture, art, or specialty fixtures, which doesn't count toward mansion tax — needs careful documentation, fair-market valuations, and a seller who agrees), buy unfinished (new-development sponsors sometimes price the unit and the buildout separately; mansion tax applies to the unit purchase, not the buildout contract), or walk away (if the seller won't budge to $1,999,000 from $2,025,000 and the cliff costs you $5,000+, sometimes the best move is a different apartment). What does NOT work: fake side payments, undisclosed credits, post-closing rebates, or labeling cash for renovation as part of price. The Department of Finance audits these. Penalties are steep. Worked example: you're buying a $2,200,000 condo and your broker negotiates the seller down to $2,100,000 (still in the 1.25% bracket). Mansion tax 1.25% × $2,100,000 = $26,250. Mortgage recording tax on a $1,575,000 mortgage at 1.925% = $30,319. Title insurance ~$9,000. Attorney + lender fees ~$6,500. Building/condo fees ~$3,500. Total closing costs roughly $75,500, or 3.6% of purchase price. Crossing the $5M cliff: at $5,050,000, mansion tax is 2.25% × $5,050,000 = $113,625. At $4,950,000, it's 1.50% × $4,950,000 = $74,250. Negotiating the seller down by $100,000 saves $39,375 in mansion tax alone, plus the $100,000 price reduction itself. Total economic benefit of crossing back below $5M is closer to $145,000. This is why $4,995,000 is one of the most common asking prices in Manhattan luxury inventory.

If you're shopping near a mansion-tax threshold and want help thinking through the negotiation strategy, or whether to push down to the next bracket or just close the deal, that's a 15-minute call. 646.939.7375.