NYC Closing Costs: The Complete 2026 Buyer's Guide

The NYC mansion tax cannot be legally avoided on purchases of $1 million or more. It applies to all residential property transactions at or above that threshold, regardless of property type — condos, co-ops, townhouses, and single-family homes. Some buyers attempt to negotiate a credit from the seller to offset the cost, but the tax itself must be paid to the city. The mansion tax rate ranges from 1% on purchases of $1M to $1.999M up to 3.9% on purchases of $25M or more.

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 generally added to the cost basis of the property rather than deducted directly. We always recommend consulting with a qualified tax professional for advice specific to your situation.

In NYC, buyers typically pay 1–6% in closing costs depending on property type, while sellers pay the real estate commission (typically 5–6%), NYC transfer tax (1% under $500K, 1.425% at or above $500K), and NYS transfer tax (0.4%). 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 from 3–4% to 4–6% of the purchase price.

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 $500K+), the NYS transfer tax (0.4%), and often the sponsor's attorney fees ($2,000–$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 4–6% of the purchase price — compared to 1–4% for resale properties.

For a $2 million resale condo in Manhattan with financing (75% LTV), typical buyer closing costs are approximately $72,000–$80,000 (3.6–4%). This includes the mansion tax ($25,000 at 1.25%), mortgage recording tax (~$28,875 for a $1.5M loan at 1.925%), title insurance (~$6,500–$8,500), attorney fees ($3,000–$5,000), and miscellaneous fees. For a $2 million new development condo, add approximately $36,500 in transfer taxes passed from the sponsor, bringing total costs to roughly $108,000–$116,000 (5.4–5.8%).

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, NYC closing costs for foreign buyers purchasing through an LLC should budget for additional legal and tax structuring costs, typically $5,000–$15,000, to ensure proper compliance with U.S. tax obligations.

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.