How much are closing costs for buyers in NYC?
Example at $3,000,000:
Illustrative figures from our calculator: cash co-op to cash condo resale; financed condo resale at 80% loan-to-value; new-development condo from cash to 80% loan-to-value with sponsor transfer taxes assigned to the buyer. Financed figures are before lender title and other title charges.
NYC has some of the highest transaction costs in the U.S., especially for new developments.
Use the instant calculator above for a quick estimate, review the detailed calculator below, or request a private closing cost breakdown from our team.
What Are Closing Costs in NYC?
Closing costs are the fees and taxes paid at the time of purchase, beyond the agreed-upon sale price. In New York City, these costs are meaningfully higher than most other U.S. markets due to several factors unique to the city:
- Multiple layers of taxation: Buyers may owe mansion tax, and buyers financing real property may also owe mortgage recording tax; co-op share loans are not subject to mortgage recording tax.
- Legal requirements: Using an attorney is customary and strongly recommended in New York real estate transactions, adding cost and complexity that does not exist in many other states.
- Financing-related taxes: Mortgage recording tax is a major New York closing cost, with the buyer's share approximately 1.8%-1.925% of the loan on condos and one- to three-family houses.
- New development cost structures: In sponsor transactions, buyers routinely absorb costs that a resale seller would normally pay, including NYC and NYS transfer taxes and the sponsor's attorney fees.
Understanding these layers is essential before committing to a purchase in Manhattan or any of the five boroughs, particularly for buyers focused on luxury condos in Manhattan.
What Taxes Do Buyers Pay in NYC?
The mansion tax is typically the single largest closing cost for NYC buyers and applies to all residential property types at or above the $1 million threshold.
How Much Is the Mansion Tax?
The mansion tax applies to all residential property types, condos, co-ops, townhouses, and single-family homes, at or above $1,000,000. Despite its name, it affects the majority of purchases in Manhattan, where the median apartment price exceeds $1 million.
| Purchase Price | Tax Rate |
|---|---|
| Under $1,000,000 | 0% |
| $1,000,000-$1,999,999 | 1.00% |
| $2,000,000-$2,999,999 | 1.25% |
| $3,000,000-$4,999,999 | 1.50% |
| $5,000,000-$9,999,999 | 2.25% |
| $10,000,000-$14,999,999 | 3.25% |
| $15,000,000-$19,999,999 | 3.50% |
| $20,000,000-$24,999,999 | 3.75% |
| $25,000,000+ | 3.90% |
How Much Is the Mortgage Recording Tax?
New York imposes mortgage recording tax on recorded mortgages secured by real property, including condos and houses. Co-op buyers are exempt because co-op transactions involve corporate shares, not real property.
| Loan Amount | Tax Rate |
|---|---|
| Under $500,000 | ~1.8% |
| $500,000 and above | ~1.925% |
For a $2 million condo purchase with 75% financing ($1.5M mortgage), the mortgage recording tax would be approximately $28,875 (1.925% of $1,500,000). This is a major closing cost in New York.
What Is CEMA and How Does It Reduce Costs?
A Consolidation, Extension, and Modification Agreement (CEMA) allows a buyer to "assume" the seller's existing mortgage balance for the purpose of calculating the mortgage recording tax. You pay the ~1.925% tax only on the difference between your new loan amount and the seller's remaining mortgage balance.
For example, if your new mortgage is $1,500,000 and the seller's existing mortgage is $1,000,000, you pay mortgage recording tax on $500,000 instead of $1,500,000, saving approximately $19,250. CEMA is available only for condos and houses, not co-ops, which are exempt from mortgage recording tax entirely.
What Does a Typical Buyer Closing Cost Breakdown Look Like?
Every NYC transaction includes a combination of the following buyer costs, depending on property type, financing, and whether the purchase is a resale or new development.
| Cost Component | Applies To | Typical Amount |
|---|---|---|
| Mansion Tax | All purchases $1M+ | 1%-3.9% of purchase price |
| Mortgage Recording Tax | Financed condos and one- to three-family houses | ~1.8%-1.925% of loan |
| Title Insurance | Condos & townhouses | Varies by price & loan |
| Attorney Fees | All purchases (customary and strongly recommended) | $5,000 |
| Bank & Lender Fees | Financed purchases | $3,000-$4,000 |
| Building Application Fees | All purchases | $500-$2,000 |
How Do Condo and Co-op Closing Costs Compare?
Condos and co-ops have fundamentally different closing cost structures. Understanding these differences is essential when evaluating co-op vs. condo purchases.
| Cost Component | Condo | Co-op |
|---|---|---|
| Mansion Tax | Yes (1%-3.9%) | Yes (1%-3.9%) |
| Mortgage Recording Tax | Yes (~1.8%-1.925%) | No, exempt |
| Title Insurance | Yes | No, not applicable |
| Attorney Fees | $5,000 | $5,000 |
| Flip Tax | N/A | Varies (usually seller pays) |
| Board Approval | Generally less restrictive | Required. Can be rigorous |
| Ownership Flexibility | More flexible (LLC, pied-à-terre, subletting) | More restrictive |
What Do NYC Closing Costs Look Like in Practice?
Three representative scenarios illustrating the range of costs buyers can expect across different property types and price points.
$1M Condo Purchase (Resale, Cash)
$3M Condo Purchase (Resale, 80% LTV)
$5M New Development Condo
Excludes lender title and other title charges and any additional contract-specific costs.
What Should Foreign Buyers Know About NYC Closing Costs?
New York City places no restrictions on foreign ownership of residential real estate. However, cross-border transactions introduce additional considerations.
- FIRPTA withholding: When purchasing from a foreign seller, the buyer generally must withhold 15% of the amount realized from the seller’s proceeds, subject to exceptions or reductions. This is generally seller withholding, not an additional buyer tax.
- Financing options may be limited: Foreign nationals may face more restrictive lending terms, higher down payment requirements, or fewer lender options. Some buyers choose to pay cash and refinance after closing.
- LLC structuring is common: Many foreign buyers purchase through an LLC or trust for asset protection, privacy, and estate planning. Budget $5,000-$15,000 for entity formation and related legal costs.
- International wire transfers require additional planning: U.S. banks and title companies are subject to anti-money laundering (AML) and know-your-customer (KYC) regulations. Foreign buyers should anticipate wire processing times of 5-10 business days and prepare detailed source-of-funds documentation.
How Do NYC Closing Costs Compare to Miami?
NYC closing costs are significantly higher than Miami due to additional buyer-side taxes, the mortgage recording tax, and new development cost structures unique to New York.
For buyers evaluating both markets, the difference in total transaction costs is substantial. NYC imposes a mansion tax on purchases of $1 million or more. A tax that does not exist in Florida. The mortgage recording tax adds nearly 2% to the loan amount for financed condo purchases, compared to a much smaller intangible tax in Miami. And in new development transactions, the practice of passing transfer taxes to the buyer is far more common and more costly in New York.
Combined with Florida's absence of a state income tax, Miami offers a meaningfully lower total cost of acquisition for comparable properties.
For owners considering relocation, see our analysis of the NYC-to-Miami tax migration.
Full NYC vs. Miami Closing Cost Comparison → | View Our Complete Miami Closing Costs Guide →
NYC Closing Costs Calculator
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NYC Closing Costs FAQ
Expert answers to the most common questions buyers ask about closing costs in Manhattan and New York City.
Can I avoid the mansion tax in NYC?
The NYC mansion tax applies to an ordinary taxable residential purchase of $1 million or more, whether a condo, co-op, townhouse, or single-family home; statutory exemptions require separate review. Some buyers attempt to negotiate a credit from the seller to offset the cost, but the tax itself must be paid. The mansion tax rate ranges from 1% on purchases of $1M to $1.999M up to 3.9% on purchases of $25M or more.
Are NYC closing costs tax deductible?
Some NYC closing costs are tax deductible, but most are not. The mansion tax and transfer taxes are not deductible for the buyer. However, mortgage interest paid at closing, real estate tax prorations, and points paid to the lender may be deductible. The mortgage recording tax is a cost of getting the loan, so it cannot be added to the property's basis and is generally not deductible on a home you live in. We always recommend consulting with a qualified tax professional for advice specific to your situation.
Who pays closing costs in NYC?
In NYC, buyers typically pay 1.5-6% in closing costs depending on property type, while sellers pay the real estate commission, NYC transfer tax (1% at $500K or less, 1.425% above $500K), and NYS transfer tax (0.4% under $3M, 0.65% at $3M+). The critical exception is new development purchases, where the sponsor (developer) contractually passes NYC and NYS transfer taxes to the buyer, which can increase buyer closing costs to 3-6%+ of the purchase price.
Why are new development closing costs higher in NYC?
New development closing costs in NYC are higher because the sponsor (developer) typically passes several costs to the buyer that a resale seller would normally pay. These include the NYC transfer tax (1.425% for properties above $500K), the NYS transfer tax (0.4%, or 0.65% at $3M or more), and often the sponsor's attorney fees ($5,000). Combined with the buyer's own mansion tax, mortgage recording tax, title insurance, and attorney fees, total closing costs on new development condos typically run 3-6%+ of the purchase price, compared to 1.5-5% for resale properties.
What are typical closing costs for a $2 million condo in Manhattan?
For a $2 million resale condo financed at 75% LTV, this calculator produces an illustrative subtotal of $73,375: $25,000 mansion tax, approximately $28,875 mortgage recording tax, a $9,000 owner-title allowance, $5,000 attorney allowance, $2,500 building allowance and $3,000 lender-fee allowance. Lender-title premiums, endorsements and other title charges are excluded; obtain an insurer quote. For new development, assuming the contract assigns both transfer taxes to the buyer, the calculator adds $36,500 in transfer taxes and increases the building allowance to $8,000, producing an illustrative subtotal of $115,375 before those excluded charges and any additional contract-specific costs.
Do foreign buyers pay additional closing costs in NYC?
Foreign buyers in NYC pay the same closing costs as domestic buyers at the time of purchase. There is no additional foreign buyer tax or surcharge in New York (unlike some international markets). However, foreign buyers should be aware of FIRPTA (Foreign Investment in Real Property Tax Act), which requires withholding a portion of the sale proceeds when the property is eventually resold. Additionally, foreign buyers purchasing through an LLC should budget for additional legal and tax structuring costs, typically $5,000-$15,000, for compliance with U.S. tax obligations.
What is CEMA and how does it reduce closing costs?
CEMA stands for Consolidation, Extension, and Modification Agreement. It allows a buyer to "assume" the seller's existing mortgage balance for the purpose of calculating the mortgage recording tax. Instead of paying the ~1.925% tax on your entire new loan amount, you pay it only on the difference between the new loan and the seller's existing mortgage balance.
For example, if you take a $1.5M mortgage and the seller's existing mortgage is $1M, you pay mortgage recording tax on $500,000 instead of $1,500,000, saving approximately $19,250. CEMA transactions take longer to close (typically 60-90 days vs. 30-60 days) and require cooperation from the seller's lender, but the savings are significant. CEMA is available only for condos and houses, not co-ops, which are exempt from mortgage recording tax entirely.
What hidden costs do buyers face in Manhattan new developments?
Manhattan new development sponsor contracts frequently shift costs to the buyer that a resale seller would normally pay. These include the NYC transfer tax (1.425%), the NYS transfer tax (0.4% or 0.65% for properties at or above $3M), the sponsor's attorney fees ($5,000), and a working capital fund contribution (amount and calculation basis set by the offering plan). These additional costs can add approximately 2-3% to the buyer's total beyond standard closing costs such as mansion tax, mortgage recording tax, and title insurance.
What is mortgage recording tax in NYC?
Mortgage recording tax in NYC totals 2.05% of the loan for loans under $500,000 and 2.175% for loans of $500,000 or more on a condominium unit or one- to three-family house. On these loans the lender generally pays 0.25%, so the buyer's share is about 1.8% or 1.925%. Co-op buyers are exempt because co-op purchases involve shares in a corporation, not real property. A CEMA (Consolidation, Extension, and Modification Agreement) can reduce this tax by allowing the buyer to pay only on the difference between the new loan and the seller's existing mortgage balance.
What should foreign buyers know about purchasing NYC real estate?
There are no restrictions on foreign ownership of NYC real estate, and foreign buyers pay the same closing costs as domestic buyers at the time of purchase. Key considerations include FIRPTA (when a foreign owner eventually sells, the buyer generally withholds 15% of the sale price, with lower rates on some homes sold for $1 million or less), LLC or trust entity structuring for asset protection and estate planning ($5,000-$15,000 in additional legal costs), international wire timing and source-of-funds compliance with anti-money laundering regulations, and the differences between sponsor and resale transactions for foreign purchasers. New development condos are generally more accessible to foreign buyers than co-ops, which may have restrictive board policies.