Short answer: in a typical New York City sale, the seller pays the broker commission and the NYC and NYS transfer taxes, and the buyer pays the mansion tax (on purchases of $1 million or more), the mortgage recording tax, title insurance and lender fees. Each side pays its own attorney. In new-development sponsor sales, the buyer usually pays the transfer taxes too.
Who pays what is set partly by law and partly by custom, and custom can be changed by the contract. Knowing the default split helps you budget and tells you which costs are worth negotiating.
Who Pays Which Closing Costs in NYC
| Closing cost | Who customarily pays in NYC | Notes |
|---|---|---|
| Broker commission | Seller | Negotiable; paid from the seller’s proceeds. |
| NYC transfer tax (RPTT) and NYS transfer tax | Seller | Buyer usually pays both in new-development sponsor sales. |
| Mansion tax | Buyer | Residential purchases of $1M or more. |
| Mortgage recording tax | Buyer | Condos and houses with a mortgage; co-ops exempt. |
| Title insurance | Buyer | Condos and houses; not used for co-ops. |
| Lender fees | Buyer | Origination, appraisal, credit report. |
| Attorney fees | Each side pays its own | Buyers in sponsor sales often also pay the sponsor’s attorney. |
| Co-op flip tax | Usually seller | Set by the building; the contract can shift it. |
| Co-op board application and move-in fees | Buyer | Set by the building and managing agent. |
| Co-op managing agent and stock transfer fees | Usually seller | Some buildings charge both sides. |
| Mortgage payoff and satisfaction fees | Seller | Charged by the seller’s lender. |
| Prorated taxes, common charges and maintenance | Split by date | Adjusted at closing so each side pays for its period of ownership. |
Estimate the totals for your price with our NYC buyer closing cost calculator or NYC seller closing cost calculator, and see our full guides to buyer closing costs and seller closing costs.
Who Pays Closing Costs on New Construction?
New-development sponsor sales flip several customary costs onto the buyer. The purchase agreement usually requires the buyer to pay the sponsor’s NYC and NYS transfer taxes and the sponsor’s attorney fee, in addition to the buyer’s own mansion tax, mortgage recording tax and title costs. Because the buyer is paying a tax the seller would normally owe, that payment is itself treated as additional consideration, which slightly increases the tax. Some sponsors agree to cover these costs as an incentive in slower markets, so they are worth raising during negotiation.
Can the Seller Pay the Buyer’s Closing Costs?
Yes, through a seller credit (also called a seller concession) negotiated in the contract. The seller agrees to credit the buyer a set amount at closing to offset the buyer’s costs. If the buyer is financing, the lender caps how much the seller can contribute:
| Buyer’s down payment | Maximum seller contribution (conventional loan, primary home) |
|---|---|
| Less than 10% | 3% of the price |
| 10% to 25% | 6% of the price |
| More than 25% | 9% of the price |
Fannie Mae and Freddie Mac limits on interested-party contributions; investment properties are capped at 2%. FHA and VA loans have their own limits. Your lender’s rules control.
A credit generally cannot exceed the buyer’s actual closing costs, and it must be disclosed to the lender. In a co-op, the board may also want to know about any credit. A credit is often easier to negotiate than a price reduction because it helps a cash-constrained buyer without lowering the recorded sale price.
Who Pays the Transfer Tax in New York?
The seller, by law and by custom. Under Tax Law §1404 the grantor (seller) pays the New York State transfer tax, and the NYC Real Property Transfer Tax is likewise the grantor’s obligation; if the seller does not pay or is exempt, the buyer becomes liable. In sponsor sales the contract shifts the cost to the buyer. See our NYC & NYS transfer tax guide for rates and examples.
Who Pays Closing Costs in New Jersey?
New Jersey follows a different pattern. The seller pays the Realty Transfer Fee and, on sales over $1 million, the Graduated Percent Fee (seller-paid since July 10, 2025). The buyer pays title insurance, lender fees and recording fees. New Jersey has no mortgage recording tax. Use our NJ transfer tax calculator and NJ buyer closing cost calculator to compare.
Are Closing Costs Negotiable?
Some are. Taxes are fixed by law, but who bears them can shift by contract in sponsor sales. Broker commissions, seller credits, flip tax allocation, the closing date (which affects prorations) and attorney and lender fees can all be negotiated. Your attorney can tell you which terms are realistic to ask for in your market and building.
Buying or selling in New York? Our NYC real estate attorneys negotiate the contract terms that decide who pays what, including seller credits and sponsor cost allocations. See how our flat fees work.
Frequently Asked Questions
Who pays closing costs in New York?
Both sides pay their own set of costs. In a typical NYC resale the seller pays the broker commission and the NYC and NYS transfer taxes, while the buyer pays the mansion tax (at $1 million or more), mortgage recording tax, title insurance and lender fees. Each side pays its own attorney.
Does the seller pay transfer tax in New York?
Yes. The seller (grantor) is responsible for the New York State transfer tax and the NYC Real Property Transfer Tax in a typical sale. In new-development sponsor sales, the contract usually requires the buyer to pay them.
Who pays the mansion tax in NYC?
The buyer pays the mansion tax on residential purchases of $1 million or more, at rates from 1% up to 3.9% of the price in NYC. If the buyer fails to pay it, the seller can become liable.
Will a seller pay the buyer’s closing costs?
Sometimes, through a seller credit negotiated in the contract. With a conventional loan on a primary home, the seller can contribute up to 3%, 6% or 9% of the price depending on the buyer’s down payment, and the credit cannot exceed the buyer’s actual closing costs.
Who pays closing costs on new construction in NYC?
In most sponsor sales, the buyer pays the sponsor’s NYC and NYS transfer taxes and the sponsor’s attorney fee, on top of the buyer’s own closing costs. Sponsors sometimes cover these as an incentive.
Are closing costs negotiable in New York?
Partly. Tax rates are fixed by law, but broker commissions, seller credits, flip tax allocation, sponsor cost allocations and professional fees can be negotiated.
Questions About Your Closing Costs?
Our real estate attorneys negotiate who pays what and review every line of your closing statement. Schedule a free consultation.
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