Close by June 30, 2019 to Avoid Increase
The 2020 New York State Budget Bill will include an increase to the New York State Transfer and Mansion taxes. These changes will affect real property in New York City and all other New York State cities with populations of over one million. In addition to the $2.00 per $500.00 of consideration of New York State Transfer Tax, which is paid by the seller, the new law will be adding an additional $1.25 per $500.00 of consideration on (i) residential property with a sales price of three million dollars or more and (ii) non-residential property with a sales price of two million dollars or more. Residential real property is defined to include a 1, 2, or 3 family house, individual residential condominium unit, and cooperative apartment unit.
Consideration Transfer Tax — Residential
| Under $3,000,000.00 — | $2 per $500 (.4%) |
| $3,000,000.00 or more — | $3.25 per $500 (.65%) |
Consideration Transfer Tax — Non-Residential
| Under $2,000,000.00 — | $2 per $500 (.4%) |
| $2,000,000.00 or more — | $3.25 per $500 (.65%) |
In addition to the 1% tax on consideration of residential (only) real property, which is known as the Mansion Tax, the bill adds in an additional tax imposed on each conveyance in New York where the real property is used as a personal residence and the consideration is in excess of one million. The supplemental Mansion tax is on residential only property located in New York City or a city in New York State with a population of one million or more. The Mansion tax is typically payable by the buyer, unless the buyer is exempt in which case the mansion tax is payable by the seller.
Consideration New York Mansion Tax
(including Supplemental Mansion Tax)
| $1,000,000.00 or less — | Not subject to tax |
| $1,000,000.00, to $1,999,999.99 — | 1% |
| $2,000,000.00 to $2,999,999.99 — | 1.25% |
| $3,000,000.00 to $4,999,999.99 — | 1.50% |
| $5,000,000.00 to $9,999,999.99 — | 2.25% |
| $10,000,000.00 to $14,999,999.99 — | 3.25% |
| $15,000,000.00 to $19,999,999.99 — | 3.50% |
| $20,000,000.00 to $24,999,999.99 — | 3.75% |
| $25,000,000.00 or more — | 3.9% |
The New Transfer and Mansion tax rates take effect on July 1, 2019 for conveyances occurring on or after July 1, 2019. If a written purchase and sales agreement exists that occurred on or before April 1, 2019, the transaction should still be taxed at the lower rates and other independent evidence of the agreement should be provided to demonstrate that the lower rate should apply. If you enter into a contract today, but close, record, and pay the transfer tax by June 30, 2019, you will pay the current rates.
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