The city's own transfer tax
New York City charges a real property transfer tax on a residential sale at one percent of the price where the value is $500,000 or less, and at 1.425 percent where it is more than $500,000. The city treats a one- to three-family house, an individual condominium unit and an individual cooperative apartment alike for this purpose. Every other kind of transfer runs higher, at 1.425 percent and 2.625 percent at the same threshold.
The Department of Finance names neither party as the payer. It says the tax is usually paid as part of closing costs and that it may docket a judgment against grantor and grantee alike, and it requires both to sign the return. Who bears it is therefore a matter for the contract, and a contract silent on the point leaves both parties exposed.
The return is Form NYC-RPT, prepared through ACRIS, the city's register system. It is filed with payment within thirty days of the transfer, and it is filed even where the transfer is exempt and the tax is zero.
The three state taxes that also apply
New York State charges its base transfer tax of two dollars for every $500 of consideration on a city sale as it does anywhere else in the state, and the seller pays it. On residential property conveyed for $3 million or more the state adds a further $1.25 for every $500, also payable by the seller.
Two more fall on the buyer. The additional tax generally called the mansion tax takes one percent of residential property conveyed for $1 million or more. Above that, a supplemental tax applies to residential property conveyed for $2 million or more, at a rate that rises with the price.
Each of the four has a fallback. Where the seller fails to pay the base tax, the buyer becomes liable and the two are jointly and severally liable for it. Where the buyer fails to pay the mansion or supplemental tax, or is exempt from it, the seller must pay.
How the supplemental tax is calculated
The rate is set by the entire conveyance amount and then applied to the consideration attributable to the residential property. A sale at $2 million or more and under $3 million carries one quarter of one percent. From $3 million to under $5 million the rate is one half of one percent. From $5 million to under $10 million it is one and one quarter percent. Above $10 million the rate continues to rise in further bands.
For a property that is partly residential and partly something else, the rate found from the whole price reaches only the residential share. The state's instructions give worked examples of each step, and the arithmetic is unforgiving enough that it belongs in the contract negotiation rather than at the closing table.
What this means in practice
A city sale at $2.5 million carries the city's 1.425 percent, the state's base tax, the one percent mansion tax and the quarter percent supplemental tax, divided between the parties in the pattern above. The same sale in Nassau County carries the state base tax and the mansion tax alone. The difference is a six-figure sum on a large transaction and a five-figure one on an ordinary apartment, and it is settled by the contract long before anyone reaches a closing table.
Anthony provides the figures for a particular transaction, with each tax identified and attributed, as part of reviewing the contract.