What is the New York real estate transfer tax rate?
The base rate is 0.4%. Tax Law §1402 imposes $2 for each $500 of consideration, or fractional part of $500, on every conveyance of real property where the consideration exceeds $500. Outside New York City, that is usually the whole state bill on an apartment building sale.
Consideration is broader than the cash at closing. Tax Law §1401(d) counts the price actually paid, the cancellation of any debt, and the amount of any mortgage or lien the property stays subject to, whether or not the buyer assumes it. If a buyer takes over your $3 million loan and pays you $1 million on top, the tax base is $4 million.
Two higher tiers exist, and both are written for New York City. Section 1402 adds $1.25 per $500 in any city of one million or more people when a residential conveyance reaches $3 million or a conveyance of any other property reaches $2 million. NYC is the only city in the state that size, so the 0.65% combined state rate is a city-only issue.
Does the mansion tax apply to an apartment building?
No. The 1% mansion tax in Tax Law §1402-a falls on residential real property selling for $1 million or more, and the statute names a one-, two- or three-family house, an individual condominium unit or a cooperative apartment unit. The Department of Taxation and Finance’s bulletin on the additional tax goes further and says a four-family house is not residential real property. A five-unit or larger rental building is outside it.
The same answer holds for NYC’s supplemental tax, the graduated buyer-paid tax of 0.25% to 2.9% on residences of $2 million or more. It uses the same residential definition. Both of these taxes belong to the buyer in any case, so they would not come out of your proceeds even where they applied.
The classification matters most for the 0.25% NYC additional base tax. Because the Tax Department treats only one- to three-family houses and individual units as residential, a 5+ unit building generally falls in the $2 million “other property” tier rather than the $3 million residential tier. A mixed-use building with stores below and apartments above is the exception: the Tax Department’s 2019 memo says all mixed-use property is treated as residential for the additional base tax, so it is not taxed at the higher rate until the price reaches $3 million. Have your title company confirm how the building is classified on Form TP-584-NYC before you sign the contract.
New York City Real Property Transfer Tax
NYC’s Real Property Transfer Tax is the larger bill by far. The Department of Finance charges residential Type 1 property (one- to three-family houses and individual condo or co-op units) 1% up to $500,000 and 1.425% above. All other transfers, which is where a whole apartment building lands, pay 1.425% at $500,000 or less and 2.625% above $500,000.
These are whole-price rates, not brackets. A $5 million building pays 2.625% on all $5 million, not just the slice over $500,000. The city tax applies once the price exceeds $25,000, and NYC’s Administrative Code makes the grantor responsible for paying it, with the buyer liable if the seller doesn’t pay.
Combine the two and a Manhattan, Brooklyn, Queens, Bronx or Staten Island apartment building over $2 million carries 3.275% in transfer taxes for the seller: 0.65% to the state and 2.625% to the city. That is more than eight times the 0.4% an owner pays on the same building in Albany or Buffalo.
Other local transfer taxes in New York
A handful of places outside NYC have their own tax on top of the state’s. The best known is the Peconic Bay region on eastern Long Island, where Tax Law §1449-bb lets participating towns levy a 2% tax on conveyances over $500 to fund land preservation, and authorizes a further 0.5% supplemental tax. Check the town before you price a sale on the East End.
Several cities and counties also impose their own transfer taxes under special state legislation. Rates and payers vary by locality, so ask the title company for a closing estimate that lists each tax as its own line.
Who pays transfer tax in New York?
The seller pays the state transfer tax and the NYC additional base tax. The Tax Department’s instructions say so directly, and if the seller is exempt or fails to pay, the buyer becomes liable. The mansion tax and NYC supplemental tax run the other way and fall on the buyer.
A contract can shift the economic cost, and buyers and sellers sometimes negotiate it. The legal liability still follows the statute, so when a party fails to pay, the Tax Department can collect from both sides.
- Outside NYC: file Form TP-584 with the county clerk when the deed is recorded.
- Inside NYC: file Form TP-584-NYC with the state and the NYC-RPT return through ACRIS.
- State deadline: no later than the 15th day after the deed is delivered.
- NYC deadline: within 30 days of the transfer, even when no tax is due.
Exemptions that matter to apartment owners
Moving the building into an LLC you own can be exempt. Tax Law §1405(b)(6) exempts conveyances that are a mere change of identity or form of ownership where there is no change in beneficial ownership. If you and your spouse own the building 50/50 and deed it to an LLC you own 50/50, the beneficial owners haven’t changed. If a new partner comes in, only the part of the interest that changes hands can be taxed.
Bona fide gifts and other conveyances without consideration, made otherwise than in connection with a sale, are exempt under §1405(b)(4). So are deeds that only secure a loan, corrections, partition deeds and conveyances under the federal bankruptcy code.
Foreclosures and deeds in lieu are not on the exemption list. Section 1401 lists a mortgage foreclosure and a transfer in lieu of foreclosure as conveyances, and the forgiven debt counts as consideration, so an owner handing a building back to the lender can still owe tax on the loan balance.
Selling the entity instead of the deed does not escape the tax. Acquiring a controlling interest, meaning 50% or more of the capital, profits or beneficial interest in a partnership, LLC or other entity, or 50% of the voting power in a corporation, is a taxable conveyance, measured by the fair market value of the real estate times the percentage transferred. NYC’s RPTT has its own 50% rule for entities that own city property.
A 1031 exchange does not exempt you either. The exchange defers federal income tax, but the relinquished building is still conveyed for consideration, so the seller pays the transfer tax just as in any other sale.
Worked example: $2 million upstate and $5 million in NYC
Start with a 24-unit building in Rochester selling for $2,000,000. The state tax is $2,000,000 ÷ $500 × $2, or $8,000. There is no additional base tax outside NYC, no mansion tax on a 5+ unit building and no city transfer tax in Rochester, so $8,000 is the total transfer tax bill.
Now a 40-unit building in the Bronx at $5,000,000. The state base tax is $20,000 (0.4%). The NYC additional base tax is $12,500 (0.25%), because the price clears the $2 million threshold. The city’s RPTT at 2.625% adds $131,250. All in, the seller pays $163,750 in transfer taxes, or 3.275% of the price.
The same $5,000,000 sale outside the city would cost $20,000. That $143,750 gap is why NYC sellers often look closely at price allocation, entity structure and timing before listing.
| Line item | $2M Rochester building | $5M Bronx building |
|---|---|---|
| NYS base tax (0.4%) | $8,000 | $20,000 |
| NYC additional base tax (0.25%) | $0 | $12,500 |
| NYC RPTT (2.625%) | $0 | $131,250 |
| Mansion and supplemental tax | Not applicable | Not applicable |
| Total paid by seller | $8,000 | $163,750 |
New York compared with neighboring states
Upstate, New York’s 0.4% is modest next to its neighbors. Pennsylvania charges 1% at the state level before local add-ons, Vermont charges 1.25% on property that won’t be the buyer’s principal residence, and Connecticut charges 1.25% on nonresidential property. NYC’s combined 3.275% for large apartment sales is higher than any of them.
| State | State-level rate | Notes |
|---|---|---|
| New York | 0.4% | 0.65% in NYC on non-residential sales of $2M+, plus NYC RPTT |
| Pennsylvania | 1% | Counties and towns add local realty transfer tax |
| Vermont | 1.25% | Lower rates for a buyer’s principal residence |
| Connecticut | 1.25% nonresidential | Residential estates 0.75% to 2.25%, tiered |
How transfer tax fits into your total cost of selling
Transfer tax is a selling expense, so it reduces the amount you realize and the gain you report. That helps, but the bigger numbers in a New York sale are usually income taxes. The federal government taxes long-term capital gains, recaptures depreciation you have claimed at up to 25%, and New York taxes the gain as ordinary income, with NYC residents paying city income tax on top.
A 1031 exchange can defer the income taxes, though not the transfer tax. Build the transfer tax into your net-proceeds math as a fixed cost, then decide whether exchanging, selling outright or carrying part of the price makes sense. Seller financing can spread income tax under the installment method, but the full transfer tax is still due when the deed is delivered.
Selling your New York apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units across New York, from the five boroughs to the Hudson Valley and upstate cities. We buy directly, can offer seller-carry terms and work inside 1031 exchange timelines.
Send the address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours, and our offer will show how the transfer taxes and other closing costs are expected to be handled so you can see your net before you commit.
