How Much Are Real Estate Transfer Taxes in NYC?

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How much are real estate transfer taxes in New York City? We’ll demystify this topic in the following video. I'm Nick at Hauseit, visit our website www.hauseit.com to learn about ways to save money when buying and selling real estate here in New York City. So, let's get started.

Combined transfer taxes for sellers in New York City are between 1.4% and 2.075% of the sale price both New York City and New York state charge a separate transfer tax. The New York City real property transfer tax is 1% to 1.425% for residential deals. The higher rate of 1.425% applies to sales about $500k, higher rates apply for commercial deals and sales of multifamily properties of four or more units. The New York State transfer tax is 0.4% for sales below $3 million and 0.65% for sales of $3 million or more. The higher rate kicks in at a lower threshold of $2 million for commercial deals and residential properties with four or more units.

You can estimate your transfer taxes in New York City with Hauseit's Interactive Transfer Tax Calculator: https://www.hauseit.com/nyc-nys-transfer-tax-calculator-for-sellers/

Buyers of residential properties priced at $1 million or more in New York City are also required to pay an additional New York State transfer tax called the Mansion Tax. Now this tax is between 1% and 3.9% of the sale price and there are eight tax brackets which increases based on the deal price. The highest tax rate of 3.9% applies to sales of $25 million or more. Now since the Mansion Tax is customarily paid by buyers, it's not usually included when referring to transfer taxes in New York City real estate, although the Mansion Tax is technically a transfer tax.

Combined New York City and New York State transfer taxes are the second largest closing costs for sellers aside from broker commissions. According to the New York State Department of Taxation and Finance, sellers in New York City paid a whopping $716 million in New York State transfer taxes in the fiscal year 2018. The New York City transfer tax rates $1.775 billion in 2016 according to the New York City office of management and budget.

So, who pays the property transfer tax in New York City? It's customary for sellers to pay the city and state transfer taxes in New York City, the only exception to this is in the case of sponsor sales. Now a sponsor sale refers to a new development condo, co-op or house or a condo or co-op unit in an existing building which is being sold directly by the sponsor for the first time. It's customary for buyers of sponsor units to pay the city and state transfer taxes, in addition to sponsor legal fees. However, this can be negotiable depending on how motivated the sponsor is to sell inventory.

Are there transfer tax exemptions in New York City? Yes, New York City exempts federal state and city entities from the payment of the real property transfer taxes. As well as the filing requirement in addition the real property transfer tax does not apply to any of the following deeds. A deed instrument or transaction by or to the United Nations or any other global organization of which the United States is a member, a deed instrument or a transaction by or to any entity operated exclusively for charitable educational or religious purposes or for the purposes of preventing cruelty to children and animals, a deed or instrument given solely as collateral or security for a debt or loan.

So, there you have it we hope you found this video helpful. I'm Nick at Hauseit, check us out at www.hauseit.com to learn about ways to save money when buying and selling real estate here in New York City and if you like this video do us a favor hit like, subscribe, leave us a comment. We'd greatly appreciate it and we hope to see you on the next one!

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