How the Mansion Tax Works
New York State's mansion tax applies to all residential purchases above $1M, paid by the buyer at closing. It is mandatory and cannot be negotiated away. It applies to the full purchase price, not just the amount above $1M. A $2M purchase at 1.25% generates a $25,000 tax bill, not $12,500.
Full Rate Schedule
| Purchase Price | Rate | Tax Due |
|---|---|---|
| $1M-$1.999M | 1.00% | $10,000-$19,999 |
| $2M-$2.999M | 1.25% | $25,000-$37,499 |
| $3M-$4.999M | 1.50% | $45,000-$74,999 |
| $5M-$9.999M | 2.25% | $112,500-$224,999 |
| $10M-$14.999M | 3.25% | $325,000-$487,499 |
| $15M-$24.999M | 3.50%-3.75% | $525,000-$937,499 |
| $25M+ | 3.90% | $975,000+ |
Analyst note: A $5M Hamptons buyer pays $112,500 in mansion tax. A $5M Nantucket buyer pays $100,000 in Land Bank fees. A $5M Newport buyer pays neither. These are real differences that affect total acquisition cost. Model them explicitly before committing to any market.