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nyc BLOG estate

Q & A: Is NY Mansion Tax Payable Under $1M?

Q: Can Mansion Tax be payable even when the purchase price is under $1 million? 

A: By Mark Maimon, VP Sterling National Bank

Under certain circumstances, yes!  When doing the calculation to determine whether a buyer is responsible for paying the Mansion Tax, we add the purchase price to any fees that the buyer is paying that would customarily be paid by the seller.  

The most common example is the New York City and State Transfer Taxes (commonly paid by the buyer when purchasing in a new condo building).  If those costs plus the purchase price add up to $1 million or more, then the Mansion Tax is triggered even if the contractual purchase price for the property is under $1 million. 

This is commonly referred to as “grossing up” the purchase price.

Example:  

A buyer purchases a new condo for $995,000 and agrees to pay for NY City Transfer Taxes on behalf of the seller. 

            Purchase Price:  $995,000
            NYC Transfer Taxes: $14,179 (1.425% of the purchase price)

            “Total Consideration”:  $1,009,179 – MANSION TAX IS REQUIRED!

Content was written and provided by Mark Maimon at Sterling National Bank.  Please contact Mark for all of your mortgage needs per the contact information below.  All material is protected by applicable copyright laws. 

212-401-0843
NMLS ID #3550

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