How the calculator works
New York City charges a mortgage recording tax when a mortgage on NYC real property is recorded. You pay a city tax and a state tax, both as a percentage of the amount being taxed. The city rate depends on the property type and on whether the mortgage is under $500,000 or $500,000 and up. The state rate is the same 1.05% on every NYC mortgage.
| Part of the tax | Under $500,000 | $500,000+ residential | $500,000+ commercial |
|---|---|---|---|
| NYC tax | 1.000% | 1.125% | 1.750% |
| NYS basic tax | 0.500% | 0.500% | 0.500% |
| NYS additional (MTA) tax | 0.300% | 0.300% | 0.300% |
| NYS special additional tax | 0.250% | 0.250% | 0.250% |
| Total | 2.050% | 2.175% | 2.800% |
"Residential" here means a one-, two- or three-family home, an individual residential condo unit or residential vacant land. Everything else, including apartment buildings with four or more units, uses the commercial city rate.
Who pays which part
The borrower pays most of the tax. The exception is the 0.25% special additional tax. Under NY Tax Law §253, on property with six or fewer dwelling units the lender must pay it and cannot pass it to you. That is why NYC buyers usually hear 1.8% (under $500,000) or 1.925% ($500,000 and up). The same section says the special additional tax does not apply at all on these small properties when the lender is a credit union or a private individual. The statute does not spell out how the six-unit test works for a condo unit in a large building, so ask your lender or title company whether the lender is paying it; the calculator lets you switch it off. On one- and two-family homes, the first $10,000 of the loan is exempt from the 0.30% MTA tax, which saves $30.
Worked example
You are buying a condo with an $800,000 mortgage. Because the loan is $500,000 or more, the residential high rate applies to the whole loan:
- NYC tax: $800,000 × 1.125% = $9,000
- NYS basic tax: $800,000 × 0.50% = $4,000
- NYS MTA tax: $800,000 × 0.30% = $2,400
- Special additional tax: $800,000 × 0.25% = $2,000, paid by the lender
Total tax is $17,400. Your share is $15,400, or 1.925% of the loan. Had the same buyer borrowed $499,999, the whole tax would have been about $10,250 instead of $10,875 at exactly $500,000. The threshold is a cliff, not a bracket.
CEMA refinances and purchases
A Consolidation, Extension and Modification Agreement (CEMA) assigns the existing mortgage to your new lender instead of paying it off. Under Tax Law §255, a later mortgage that secures "new or further indebtedness" is taxed only on that new money. If you refinance an $800,000 condo loan and $450,000 of the old balance is assigned, only $350,000 is taxed: $6,300 for you instead of $15,400. Some sellers agree to assign their loan in a purchase CEMA, too. CEMAs carry their own legal and lender fees, so compare the net savings.
Co-ops
A co-op loan is secured by shares and a proprietary lease, not a recorded mortgage. The Department of Finance says mortgages on individual cooperative apartments do not incur the tax, so co-op buyers pay $0. Co-ops have other costs, such as flip taxes and board fees.
Next steps
Add the result to your full budget with the NYC closing cost calculator, check whether you also owe the mansion tax, and read our guide to CEMA loans before you refinance.