How the mansion tax is calculated
New York charges the buyer an extra transfer tax on homes that cost $1,000,000 or more. Statewide it is a flat 1% under Tax Law §1402-a. In New York City a second, "supplemental" tax under §1402-b starts at $2,000,000 and adds 0.25% to 2.9% depending on the price. The calculator finds your bracket and multiplies the combined rate by the full price.
The key detail: the rate is not marginal. Once the price reaches a threshold, the higher rate applies to every dollar, not just the dollars above it. That creates "cliffs", where one extra dollar of price can add thousands in tax.
| Purchase price | State | NYC supplemental | Combined rate |
|---|---|---|---|
| Under $1,000,000 | 0% | 0% | 0% |
| $1M to under $2M | 1% | 0% | 1% |
| $2M to under $3M | 1% | 0.25% | 1.25% |
| $3M to under $5M | 1% | 0.5% | 1.5% |
| $5M to under $10M | 1% | 1.25% | 2.25% |
| $10M to under $15M | 1% | 2.25% | 3.25% |
| $15M to under $20M | 1% | 2.5% | 3.5% |
| $20M to under $25M | 1% | 2.75% | 3.75% |
| $25M and up | 1% | 2.9% | 3.9% |
Worked example
You agree to buy a Brooklyn condo for $2,100,000. That falls in the $2M–$3M bracket, so the combined rate is 1.25%:
- State mansion tax: $2,100,000 × 1% = $21,000
- NYC supplemental tax: $2,100,000 × 0.25% = $5,250
- Total paid by you at closing: $26,250
Had the price been $1,999,999, you would pay 1%, about $20,000. Crossing $2,000,000 adds roughly $5,000 of tax in one step. So any price between $2,000,000 and about $2,005,000 costs you more in added tax than the seller gains in price. The calculator calls this the cliff zone and flags it. At the $1,000,000 threshold the jump is $10,000, so the zone runs to about $1,010,000.
Rules the calculator relies on
- Who pays: the buyer. The seller becomes liable only if the buyer fails to pay or is exempt, and then both are jointly liable (§1402-a(b), §1402-b).
- What counts as residential: one-, two- and three-family houses, individual condo units and co-op apartment units, plus other premises used as a personal residence.
- Where the supplemental tax applies: only in cities with one million or more people, which in New York State means NYC. It applies to conveyances on or after July 1, 2019, excluding those under a binding contract signed on or before April 1, 2019 (NYS Department of Taxation and Finance).
- Separate from transfer taxes: the mansion tax is in addition to the state and NYC real property transfer taxes, which the seller normally pays. See NYC and NYS transfer taxes.
Edge cases
Mixed-use buildings are taxed only on the part of the price attributable to the residential portion, so this calculator, which assumes the whole price is residential, will overstate the tax. Purchases of partial interests and new-development deals where the buyer also pays the seller's transfer taxes can change the consideration. Your closing attorney prepares Form TP-584-NYC and will compute the final figure.
What to do next
Add the mansion tax to the rest of your purchase costs with the NYC closing cost calculator, and if you are financing a condo or house, check the mortgage recording tax. For the full background, read NYC Mansion Tax: rates, brackets and who pays.