If you do not live in New York State when you sell New York real estate, the state collects an estimated income tax payment at closing. For 2026 it equals your gain times 10.9%, the top state rate. It is a prepayment of your New York income tax, not an extra tax: you get credit for it when you file your nonresident return.
At a glance
- 2026 rate
- 10.90%
- Highest NYS rate under Tax Law §601
- House, condo, land, building
- Form IT-2663
- Paid when the deed is recorded
- Co-op shares
- Form IT-2664
- Mailed within 15 days of transfer
- NYC income tax
- None
- Nonresidents of the city do not owe it
How the calculation works
The form's worksheet computes the gain the same way as your federal return. Your adjusted basis is the purchase price plus improvements, purchase closing costs and other increases, minus depreciation. Your gain is the sale price minus selling expenses minus that basis. If the result is a gain, multiply it by 10.9% and round to the nearest dollar. If it is zero or a loss, nothing is due, but you still complete the form.
If you were one of several sellers, the gain is split the way it is for federal tax and each nonresident files a separate form. A married couple can file one form with one check. If only part of the property was your main home, such as the owner's unit in a two-family house, the estimated tax applies only to the gain on the other part.
Worked example
A married couple who moved to New Jersey sells a Brooklyn condo they rented out for $1,100,000. They paid $700,000 plus $12,000 in closing costs, added $25,000 of improvements, took $90,000 of depreciation and pay $80,000 to sell.
| Worksheet line | Amount |
|---|---|
| Line 14: adjusted basis ($700,000 + $12,000 + $25,000 − $90,000) | $647,000 |
| Line 15: sale price less selling expenses | $1,020,000 |
| Line 17: gain | $373,000 |
| Line 20: estimated tax ($373,000 × 10.9%) | $40,657 |
With $150,000 of other income, their real 2026 New York tax on the gain works out to roughly $24,800 under the Form IT-203 method (tax on all income as if they were residents, including New York's high-income recapture, times the New York share of their income). They would claim the $40,657 payment on IT-203 and could get roughly $15,900 back. The calculator shows this rough refund estimate, but the actual figure depends on your full return.
Who does not have to pay
- The whole property was your principal residence under IRC §121. You qualify even if part of the gain is more than the exclusion.
- The sale results in a loss, or you do not have to recognize gain (for example, a §1031 like-kind exchange).
- You are giving the property to the lender in foreclosure or in lieu of foreclosure with no additional consideration (IT-2663 only).
- A US or New York State agency, Fannie Mae, Freddie Mac, Ginnie Mae or a private mortgage insurer is the buyer or seller.
Residents and exempt nonresidents sign the certification on Form TP-584, Schedule D (TP-584-NYC for city property).
Filing steps
- 1
Gather your numbers
Closing statement from your purchase, improvement receipts, depreciation schedules and the expected selling costs. - 2
Complete the worksheet
Your attorney usually prepares IT-2663 or IT-2664 with the transfer tax returns. - 3
Pay at the right time
IT-2663 and full payment go to the recording officer with the deed. IT-2664 goes to the NYS Tax Department with TP-584 within 15 days of the transfer. - 4
File Form IT-203 next year
Report the sale on your nonresident return and claim the payment as estimated tax. Any excess is refunded then.
What to do next
Estimate your full federal and state tax with the home sale capital gains calculator, and your closing costs with the seller transfer tax calculator.