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NYC Mansion Tax Explained (2026): Brackets & Who Pays

It is called a mansion tax, but in 2026 Queens it lands on ordinary two-bedroom condos — and the buyer pays it, in cash, at closing.

Mansion tax threshold: $1,000,000 — buyer pays, in cash, at closing
Rate range (2026): 1.00% at $1M up to 3.90% at $25M+
Tax on a $2.5M purchase: $31,250 (1.25% of full price)
The $5M cliff: $37,500 more tax for $1 more in price

Updated September 2026 · Queens, NY

What the mansion tax actually is

The mansion tax is a New York State tax on residential purchases of $1 million or more, paid by the buyer at closing. Despite the name, it has nothing to do with mansions: it applies to any residential purchase — houses, condos, and co-ops alike — anywhere in New York State, with an additional progressive surcharge inside New York City's five boroughs. It is a one-time tax, due when the deal closes, and it cannot be rolled into your mortgage.

The base tax is 1% on purchases from $1 million up to $2 million. Above $2 million, the NYC supplemental mansion tax adds progressive tiers that bring the combined rate as high as 3.9%. Proposals to raise these rates further were floated in Albany in spring 2026 but were dropped from the final state budget — the brackets below are the rates in effect now.

One legal detail worth knowing: although the buyer pays, the seller is on the hook if the buyer fails to pay or is exempt — the liability becomes joint. In practice this just means the tax gets collected at the closing table without exception. Nobody is slipping past it.

The 2026 brackets, all eight of them

Here is the full progressive scale for NYC purchases. The critical thing to understand — and the thing that surprises every first-time $1M-plus buyer — is that the rate applies to the entire purchase price, not just the amount above the threshold. It works nothing like income tax brackets.

Purchase price $1,000,000 to $1,999,999: 1.00%. $2,000,000 to $2,999,999: 1.25%. $3,000,000 to $4,999,999: 1.50%. $5,000,000 to $9,999,999: 2.25%. $10,000,000 to $14,999,999: 3.25%. $15,000,000 to $19,999,999: 3.50%. $20,000,000 to $24,999,999: 3.75%. $25,000,000 and up: 3.90%. Buy under $1 million and you owe zero.

Because the full price is taxed at the tier rate, every threshold is a cliff. A purchase at $1,999,999 pays $19,999.99 in mansion tax; at $2,000,000 it pays $25,000 — a $5,000 jump for one dollar of price. The $5 million line is the nastiest: $4,999,999 costs $74,999.99 in tax, while $5,000,000 costs $112,500. That is a $37,500 penalty for a single dollar.

Worked examples at real Queens prices

A $1,200,000 condo in Astoria: 1% of the full price, or $12,000, due from the buyer at closing. A $2,500,000 house in Forest Hills: 1.25%, or $31,250. A $5,000,000 new development unit in Long Island City: 2.25%, or $112,500. Each of these is on top of the down payment, attorney fees, title charges, and every other closing cost.

Now watch the thresholds do their work. If that Forest Hills house could be negotiated from $2,000,000 to $1,999,999, the buyer saves $5,000 in tax on top of the $1 price difference. Negotiating a $5,000,000 listing down to $4,999,999 saves $37,500 in tax. These are not rounding errors — they are legitimate negotiation leverage, and experienced NYC buyer's agents price their offers around these lines deliberately.

For context on how often this bites in Queens: with the borough's median listing price at $660,200, most Queens purchases never touch the mansion tax. But in neighborhoods like Long Island City, Forest Hills, Astoria, and Douglaston — where $1M-plus sales are routine — it is a standard line item, not an edge case.

How it interacts with the mortgage recording tax

The mansion tax is not the only buyer-side tax at a NYC closing. If you finance the purchase, you also pay the mortgage recording tax: 1.80% of the loan amount on loans under $500,000, or 1.925% on loans of $500,000 or more (your lender separately pays 0.25%). On a $1.2 million purchase with 20% down, that is a $960,000 loan and roughly $18,450 in mortgage recording tax — larger than the $12,000 mansion tax on the same deal.

Here is the wrinkle buyers miss: co-ops are exempt from the mortgage recording tax (you are buying shares in a corporation, not recording a mortgage on real property), but co-ops are not exempt from the mansion tax. A $1.5 million co-op purchase owes the full 1% mansion tax — $15,000 — while paying zero mortgage recording tax. Condos and houses pay both.

Add it up for a financed $1.2 million condo at 20% down: $12,000 mansion tax plus about $18,450 mortgage recording tax, or roughly $30,450 in buyer-side transfer taxes alone — about 2.5% of the purchase price before any other closing cost. This is why NYC closing-cost estimates run 3% to 5% of price for financed buyers, and why the cash you need at closing is always more than the down payment.

How buyers budget for it

The mansion tax must be paid in cash at closing — it cannot be financed into the mortgage, and most lenders will not let you borrow against it. That means it comes out of the same liquid funds as your down payment, which effectively reduces how much house your cash covers. A buyer with $250,000 in cash looking at a $1.2 million home is not putting $240,000 down and keeping $10,000 in reserve; after the $12,000 mansion tax, the real down payment math is tighter than it looks.

Build it into your offer math from the start. When you run closing-cost estimates, add the mansion tax as its own line the way you would the down payment. If you are stretching to reach a price just over a threshold — say $2,050,000 — model what the deal looks like at $1,999,999 instead, and let your agent use the $5,000-plus tax savings as part of the negotiation story. Sellers near thresholds often understand this math better than buyers do.

Refinancing does not trigger the mansion tax — it is a purchase tax, paid once. And selling later does not refund it. It is a sunk cost of buying at that price level, so the only real strategies are budgeting for it honestly and negotiating the price with the brackets in mind.

Co-ops, condos, houses, new development: it all counts

There is no property-type escape hatch. The mansion tax applies to one-, two-, and three-family houses, individual condo units, and co-op apartments equally. Buying from a sponsor in a new development does not exempt you either — and in new developments, buyers often also pick up the transfer taxes that a resale seller would normally pay, which stacks on top of the mansion tax.

Mixed-use properties follow the residential portion rules, and purchases by LLCs or trusts do not dodge the tax. The $1 million threshold is based on the purchase price (consideration) for the residential property, full stop.

If you are buying just under $1 million to avoid the tax, be careful with the final numbers: seller concessions, credits, and adjustments at closing do not change the recorded purchase price. A $1,005,000 contract with a $10,000 credit is still a $1,005,000 purchase for mansion tax purposes — and still costs you $10,050.

Questions, answered.

Does the seller ever pay the mansion tax?

No — it is the buyer's tax, paid at closing. The only exception is a backstop: if the buyer fails to pay or is exempt, the seller becomes jointly liable. In normal transactions the buyer simply pays it as a closing cost, like attorney fees or title insurance.

Can I roll the mansion tax into my mortgage?

No. Lenders will not finance the mansion tax — it has to come from your cash at closing, alongside the down payment. This is the single most common budgeting mistake $1M-plus buyers make: they save exactly the down payment and then discover they are $12,000 to $30,000 short at the closing table.

Does the mansion tax apply to co-ops?

Yes. Even though co-op buyers purchase shares rather than real property, the mansion tax explicitly covers co-op sales of $1 million or more. Note the asymmetry: co-ops are exempt from the mortgage recording tax but not from the mansion tax, while condos and houses pay both.

Is the mansion tax deductible?

Generally no, not in the way mortgage interest or property taxes are — it is a one-time transfer tax, not an ongoing ownership cost. Tax treatment can vary with individual circumstances, so confirm with your accountant rather than assuming anything at tax time.

What if the purchase price is exactly $1,000,000?

You pay. The 1% bracket starts at $1,000,000 — that single dollar over $999,999 is the most expensive dollar in NYC real estate, triggering a $10,000 tax bill. This is why you see so many listings and contracts priced at $999,000 or $999,999.

Do I pay mansion tax when I refinance?

No. The mansion tax is triggered by a purchase, not by refinancing or by taking out a home equity loan. You pay it once, when you buy. (Refinancing has its own smaller tax considerations around the mortgage recording tax, which a CEMA can sometimes reduce — ask your attorney.)

Keep reading.

Related tools and guides:

NYC Closing Cost Calculator (2026)

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