Understanding the New York Mansion Tax: A Buyer's Primer

If you're purchasing a home in Westchester County at or above $1 million — and in today's market, that describes a significant share of transactions — you will encounter New York's Mansion Tax at the closing table. Understanding exactly what it is, how it's calculated, and who pays it is essential before you make an offer.

What Is the Mansion Tax?

The Mansion Tax is a New York State transfer tax imposed on the buyer of any residential real property that sells for $1 million or more. At its base rate, it is 1% of the entire purchase price — not just the amount above $1 million. A home purchased for $1,050,000, for instance, carries a Mansion Tax of $10,500.

The 2019 Progressive Surcharges

In April 2019, New York significantly expanded the Mansion Tax for properties in New York City and certain surrounding counties. For residential purchases in New York City at $2 million and above, a progressive surcharge applies on top of the base 1%:

• $2M–$2.999M: additional 0.25% (total 1.25%)
• $3M–$4.999M: additional 0.50% (total 1.50%)
• $5M–$9.999M: additional 1.00% (total 2.00%)
• $10M–$14.999M: additional 2.25% (total 3.25%)
• $15M–$19.999M: additional 2.50% (total 3.50%)
• $20M–$24.999M: additional 2.75% (total 3.75%)
• $25M and above: additional 2.90% (total 3.90%)

Important for Westchester buyers: the progressive surcharges above $2 million apply only to residential purchases in New York City (the five boroughs). Westchester County transactions are subject only to the base 1% rate, regardless of purchase price. This is a meaningful distinction when you're comparing a purchase in Scarsdale versus a co-op on the Upper East Side.

Who Pays, and When?

The Mansion Tax is a buyer's obligation, paid at closing. It is separate from — and in addition to — the New York State transfer tax (paid by the seller at 0.4% of the purchase price) and any applicable mortgage recording tax. Your attorney will ensure it appears correctly on the closing statement; never assume it has been accounted for without verifying the line items.

At Summit Real Estate, we build Mansion Tax into every buyer's cost projection from the first showing. Our background in real estate law means we catch these details before they become surprises. If you're planning a purchase at or near the $1 million threshold, contact us — even small structuring decisions can have meaningful tax implications.