NYC Transfer Tax Guide: Rates, Exemptions, and Who Pays

Transfer taxes are one of the largest closing costs in a New York City real estate transaction. Both New York City and New York State impose separate transfer taxes on the conveyance of real property, and the combined rate can add tens of thousands of dollars to the cost of selling. Understanding the current rates, who is responsible for payment, what exemptions are available, and how transfer taxes interact with other closing costs is essential for both buyers and sellers planning a transaction in NYC.

This guide covers the NYC Real Property Transfer Tax (RPTT), the New York State Real Estate Transfer Tax, and how they apply to different property types and transaction structures.

New York City Real Property Transfer Tax (RPTT)

The NYC RPTT applies to the transfer of real property or economic interests in real property located in New York City. The tax is imposed on the grantor (seller) and is due at the time the deed is recorded. As of early 2026, the rates are structured as follows. For residential property (one- to three-family homes, condos, and individual co-op units), the rate is 1% of the sale price for sales of $500,000 or less and 1.425% for sales above $500,000. For commercial and other property (including multi-family buildings with four or more units and all other non-residential property), the rate is 1.425% for sales of $500,000 or less and 2.625% for sales above $500,000.

The RPTT applies to co-op sales as well, even though co-op transactions involve the transfer of shares rather than real property. For RPTT purposes, the transfer of co-op shares is treated as a transfer of an economic interest in real property. The tax is calculated on the total consideration, which includes the purchase price plus the buyer's proportionate share of the building's underlying mortgage.

New York State Real Estate Transfer Tax

The NYS transfer tax is separate from the NYC RPTT and applies to all real property transfers in the state. The standard rate is $2 per $500 of consideration (effectively 0.4%). For residential property sold for $3 million or more and commercial property sold for $2 million or more, an additional tax of 0.25% applies (sometimes called the supplemental transfer tax or the "mansion tax surcharge," though it is distinct from the buyer's mansion tax). The NYS transfer tax is also customarily paid by the seller.

Combined Transfer Tax Rates

For sellers of residential property in NYC, the combined transfer tax burden (RPTT plus NYS) depends on the sale price. For sales at or below $500,000, the combined rate is approximately 1.4% (1% RPTT plus 0.4% NYS). For sales above $500,000 but below $3 million, the combined rate is approximately 1.825% (1.425% RPTT plus 0.4% NYS). For sales of $3 million or more, the combined rate is approximately 2.075% (1.425% RPTT plus 0.4% NYS plus 0.25% supplemental NYS tax). On a $1 million residential sale, the seller owes approximately $18,250 in combined transfer taxes. On a $2 million sale, approximately $36,500. These are significant costs that must be factored into the seller's net proceeds calculation. For a complete breakdown of all seller costs, see our seller closing costs guide.

Who Pays the Transfer Tax?

By custom and by statute, the seller pays the transfer tax in New York. However, in certain transactions, the parties can negotiate a different allocation. The most common scenario where the buyer pays the transfer tax is in a new development purchase from a sponsor. Sponsors of new condominiums frequently structure the transaction so that the buyer pays the NYC and NYS transfer taxes as part of the purchase terms set forth in the offering plan. This effectively increases the buyer's closing costs by 1.4% to 2.075% of the purchase price. If you are purchasing a new development condo, review the offering plan carefully to determine whether you are responsible for the sponsor's transfer taxes. For more on new development purchase costs, see our buyer closing costs guide.

Transfer Tax Exemptions

Certain transfers are exempt from the NYC RPTT and the NYS transfer tax. Common exemptions include transfers between spouses (including transfers incident to divorce), transfers to or from the United States, New York State, or any political subdivision, transfers by a referee or receiver pursuant to a court order, certain transfers to or from tax-exempt organizations, transfers of property for less than $25,000 (exempt from NYC RPTT only), and corrections of deeds (where no additional consideration is paid). Transfers between related entities (such as between an individual and an LLC that the individual controls) are generally not exempt and are subject to the transfer tax on the fair market value of the property. Your attorney can determine whether an exemption applies to your specific transaction.

Transfer Tax on Co-op Sales

As noted above, co-op sales are subject to the NYC RPTT even though the transaction involves shares rather than real property. The taxable consideration for a co-op sale includes the purchase price paid by the buyer plus the buyer's proportionate share of the building's underlying mortgage (if any). This means the taxable base for a co-op sale may be higher than the purchase price alone. For example, if the purchase price is $800,000 and the buyer's share of the building's underlying mortgage is $150,000, the RPTT is calculated on $950,000. Your attorney calculates the RPTT based on the total consideration and ensures the correct amount is reflected on the closing statement.

Transfer Tax and 1031 Exchanges

A 1031 exchange allows the seller of an investment property to defer federal and state capital gains taxes by reinvesting the proceeds into a like-kind property. However, the 1031 exchange does not defer transfer taxes. The NYC RPTT and NYS transfer tax are due on the sale of the relinquished property regardless of whether the proceeds are reinvested through a 1031 exchange. Transfer taxes are also due on the purchase of the replacement property (paid by the seller of that property, unless negotiated otherwise). For more on 1031 exchanges, see our 1031 exchange practice page.

Transfer Tax and LLCs

Transferring property to or from an LLC can trigger transfer tax liability. If an individual transfers property to an LLC (even one they control), the transfer is subject to transfer tax on the fair market value of the property unless an exemption applies. Similarly, if an LLC sells or transfers property, the transfer tax is due on the consideration. Transfers of membership interests in an LLC that owns real property may also trigger transfer tax if the transfer results in a change of control (a transfer of 50% or more of the beneficial interest). These rules are complex and fact-specific. Consult your attorney before structuring any transfer involving an LLC that owns New York real property.

Transfer Tax on New Development Purchases

New development condo purchases from a sponsor present a unique transfer tax dynamic. The sponsor (developer) is technically the seller and would normally be responsible for the transfer tax. However, most offering plans for new development condos shift the transfer tax obligation to the buyer as a term of the purchase. This means the buyer pays both the buyer's mansion tax (if applicable) and the seller's transfer tax, significantly increasing the buyer's closing costs. For a $2 million new development condo, the buyer could owe approximately $25,000 in mansion tax plus approximately $36,500 in transfer taxes that would normally be the seller's obligation. Combined with other closing costs, new development buyers can pay 5-6% or more of the purchase price in closing costs. This transfer tax shift is typically non-negotiable in strong markets but may be negotiable in slower markets, particularly for units that have been on the market for an extended period. Your attorney should review the offering plan and identify all costs allocated to the buyer before you sign the purchase agreement.

Transfer Tax Filing Requirements

The NYC RPTT return (Form NYC-RPT) must be filed with the NYC Department of Finance at the time the deed is recorded. The NYS transfer tax return (Form TP-584) must be filed with the county clerk at the time of recording. For co-op sales, the NYC RPTT return (Form NYC-RPT Real Property) is filed directly with the Department of Finance because no deed is recorded. Both returns require the signature of the grantor (seller) and are prepared by the seller's attorney. Failure to file or pay the transfer tax at the time of recording can result in the deed being rejected for recording, penalties and interest on the unpaid tax, and a lien on the property for the unpaid amount. Your attorney ensures that all transfer tax returns are properly prepared, signed, and filed at closing.

Planning Strategies

Planning Strategies

While transfer taxes are generally unavoidable, several strategies can minimize their impact. Negotiate the allocation of transfer taxes in the contract (particularly in new development purchases, where the buyer's obligation to pay the sponsor's transfer taxes may be negotiable). Structure entity transfers carefully to avoid triggering transfer tax on intra-entity transfers. For sellers with properties in the $500,000 range, understand that pricing just above or below $500,000 affects the RPTT rate (the rate increases from 1% to 1.425% for residential sales above $500,000). Factor transfer taxes into your listing price and net proceeds calculation from the start. Your attorney and tax advisor should coordinate on the transfer tax implications of your transaction before the contract is signed. Early planning ensures that transfer taxes are accurately reflected in the closing cost projections and that any available exemptions or structuring options are identified before the terms are locked in. For complex transactions involving entity transfers, partial interest sales, or multi-property portfolios, the transfer tax analysis should be part of the overall transaction planning from the start. For a complete seller cost analysis, use our seller closing cost calculator.

Transfer Tax Outside NYC

For properties in the New York suburbs (Westchester, Long Island, the Hudson Valley), only the NYS transfer tax applies. There is no local transfer tax equivalent to the NYC RPTT in most suburban municipalities. The NYS rate is 0.4% (or 0.65% for residential sales of $3 million or more and commercial sales of $2 million or more). This means sellers in the suburbs pay significantly less in transfer taxes than sellers in NYC. For example, on a $750,000 home sale in Westchester, the NYS transfer tax is $3,000. The same sale in NYC would incur approximately $13,688 in combined NYC and NYS transfer taxes. This difference in transaction costs is one factor that makes suburban properties more attractive to sellers on a net proceeds basis.

For properties in New Jersey, the New Jersey Realty Transfer Fee applies. The fee is calculated on a graduated scale starting at $2 per $500 of consideration, with rates increasing for sales above $150,000. New Jersey also imposes a supplemental fee on sales above $1 million. Sellers who are buying a replacement home in New Jersey may be eligible for an exemption from a portion of the fee. For more on New Jersey transactions, see our New Jersey closing guide.

Frequently Asked Questions

Frequently Asked Questions