The NYC Mansion Tax, Explained (And How to Avoid the Next Bracket)
Last updated: October 2026
The quick answer: The NYC mansion tax is a one-time tax the buyer pays at closing on any home that sells for $1 million or more. It starts at 1% ($10,000 on a $1M purchase) and rises to 3.9% above $25 million. The rate applies to the entire price, not just the part over $1 million. Buy under $1 million and you owe nothing.
2026 mansion tax rates at a glance
| Purchase price | Rate | Minimum tax |
|---|---|---|
| $1M to under $2M | 1.00% | $10,000 |
| $2M to under $3M | 1.25% | $25,000 |
| $3M to under $5M | 1.50% | $45,000 |
| $5M to under $10M | 2.25% | $112,500 |
| $10M to under $15M | 3.25% | $325,000 |
| $15M to under $20M | 3.50% | $525,000 |
| $20M to under $25M | 3.75% | $750,000 |
| $25M and up | 3.90% | $975,000 |
These rates have been in place since 2019 and are unchanged for 2026.
What you'd owe at common Brooklyn prices
Most Brooklyn buyers who hit the mansion tax are in the first two brackets. Here's the math on prices we see every week:
| Purchase price | Mansion tax |
|---|---|
| $995,000 | $0 |
| $1,050,000 | $10,500 |
| $1,250,000 | $12,500 |
| $1,500,000 | $15,000 |
| $1,950,000 | $19,500 |
| $2,050,000 | $25,625 |
Want your exact number, plus the rest of your closing costs? Use the Buyer Closing Cost Calculator.
What is the NYC mansion tax?
You found the apartment. You did the math on the down payment, the mortgage, the closing costs. Then your attorney says two words that make your stomach drop: mansion tax.
The mansion tax is a one-time New York State tax on residential property in New York City that sells for $1 million or more. The buyer pays it at closing, on top of other closing costs.
"Mansion" is generous marketing. In this market, $1 million buys a perfectly normal two-bedroom in plenty of Brooklyn neighborhoods. No ballroom required.
It started in 1989 as a flat 1% on sales of $1M and up. In 2019, the state added seven higher tiers for New York City, scaling up to 3.9%.
The cliff: why one dollar can cost you thousands
Because the rate applies to the whole price, every threshold is a cliff, not a ramp.
- $999,999: mansion tax is $0
- $1,000,000: mansion tax is $10,000
That's a $10,000 jump for one extra dollar. It happens again at every line:
- $1,999,999 at 1.00% = $19,999
- $2,000,000 at 1.25% = $25,000
That's about $5,000 more for one dollar of price. A home priced right at a threshold is almost never a good deal.
How to avoid the next bracket
This is where having someone in your corner pays for itself. The mansion tax is calculated on the purchase price, so the goal is simple: when you're close to a line, keep the price on the right side of it without changing what the deal is actually worth to either side.
1. Know where the lines are, and negotiate just under when you're close
Before you make an offer, check where the price sits against the brackets: $1M, $2M, $3M, $5M and up. If a home is listed at $1,005,000, getting to $999,000 saves you $6,000 in price and erases the full $10,000 mansion tax, a real swing of about $16,000. Sellers near a round number often know the cliff scares buyers, which gives you leverage.
2. If you're right at the line, restructure who pays what
Sometimes the price can't come down without the seller losing money. That's when you look at the other costs in the deal. On one of my transactions, the price was landing just over $5 million, where the rate jumps from 1.5% to 2.25% on the entire price. Instead of the seller paying the buyer's agent commission out of the sale, the buyer paid it directly and the purchase price came down by the same amount. The seller netted the same, the buyer's total cost stayed about the same, and the price landed under $5 million, which saved the buyer tens of thousands in mansion tax.
3. With new construction, trade concessions for a lower price
Sponsors think in spreadsheets: what matters to them is their net per unit. If a sponsor is offering to pay closing costs like transfer taxes and the price is close to a bracket line, flip it. Offer to pay those costs yourself in exchange for a lower purchase price. The sponsor's net looks the same, and a lower price can keep you under the threshold. Browse what's coming to market on our New Developments page.
Every one of these moves needs to be real and documented, and it should go through your attorney before you sign. Don't split one sale into pieces or misstate the price. The state treats related transfers as one transaction, and getting it wrong means penalties and interest.
What the mansion tax is not
- It's not an annual tax. You pay it once, at purchase. Your yearly bill is property tax, which is a separate thing.
- It's not based on square footage or how fancy the home is. It's purely the price.
- It's not the only transfer tax at closing. NYC and New York State also charge transfer taxes, which the seller usually pays on a resale (but the buyer often pays on new construction).
What changed in 2026: the new pied-à-terre tax
The 2026 state budget left mansion tax rates alone but created a separate tax: an annual pied-à-terre tax on higher-value NYC homes that are not the owner's primary residence. It took effect July 1, 2026.
If the home you're buying will be your primary residence, it doesn't apply to you. If you're buying a second home or an investment property in the city, the thresholds and rates differ for houses versus condos and co-ops, so ask your attorney or accountant how it applies before you sign.
Key takeaways
- The NYC mansion tax is a one-time, buyer-paid tax on residential sales of $1M or more, from 1.0% to 3.9%.
- The rate applies to the full price, so every threshold is a cliff.
- The most effective way to avoid the next bracket is to negotiate the price below the line.
- Buy under $1 million and you owe nothing.
Frequently asked questions
How much is the mansion tax on a $1 million apartment?
$10,000. It's a flat 1% on purchases from $1,000,000 to $1,999,999.
Who pays the mansion tax in NYC, the buyer or the seller?
The buyer pays it at closing. On a resale, the seller usually pays the separate NYC and NY State transfer taxes.
Is the mansion tax calculated on the whole price or just the amount over $1 million?
The whole price. A $1,200,000 purchase owes 1% of $1,200,000, which is $12,000.
Did the NYC mansion tax change in 2026?
No. The rates are the same as they've been since 2019. The 2026 state budget added a separate annual pied-à-terre tax on certain non-primary NYC residences instead.
Is there a legal way to avoid the NYC mansion tax?
Yes. Most commonly by negotiating the price below $1,000,000 or below the next threshold. Putting genuine personal property on a separate bill of sale can also lower the taxable price. Review both with your attorney.
Does the mansion tax apply outside New York City?
A 1% mansion tax applies to residential sales of $1M and up across New York State. The higher tiers, up to 3.9%, apply only in New York City.
Is the mansion tax a yearly tax?
No. It's paid once, at the time of purchase.
Does the mansion tax apply to co-ops?
Yes. Co-op purchases of $1 million or more are subject to it, the same as condos and houses.
Related guides
- The Complete Guide to NYC Closing Costs for Buyers
- Buyer Closing Cost Calculator
- Should You Rent or Buy in NYC? 5-Year Calculator
- Buying a New Development Condo in Brooklyn
This post is for general information and isn't tax or legal advice. Confirm specifics with your real estate attorney and accountant before closing.