CLOSING COSTS GLOSSARY
Mansion Tax: 1% to 3.9%
A graduated tax that applies to all real estate purchases of $1 million or more. The tax starts at 1% of the purchase price and increases to 3.9% for purchases above $25 million.
Mortgage Recording Tax: 1.8% to 1.925%
For buyers purchasing with a mortgage, New York State and City mortgage recording taxes apply. The tax is 1.8% on loans under $500,000 and 1.925% on loans $500,000 and above. The Mortgage Recording Tax does not apply to co-ops purchases. That’s because co-op purchasers don’t actually buy real property; they buy shares of the corporation that owns the co-op, and the tax only applies to purchases of real property.
NYC and NY State Transfer Tax: 1.4% to 2.075%
New York State and New York City both charge a transfer tax for real estate transactions. New York State's transfer tax is 0.4% for sales under $3 million and 0.65% for sales of $3 million and above. New York City charges a transfer tax of 1% for properties $500,000 and below to 1.425% for sales over that amount. Transfer taxes are typically paid by the seller for resales and the buyer when purchasing a new development.
Title Insurance: 0.45%
Title insurance protects a buyer against future claims against someone else claiming ownership (or “title”) of the property. In New York, buyers pay 0.45% of their new home’s purchase price for title insurance. Co-op purchasers don’t pay title insurance for the same reason they don’t pay the Mortgage Recording Tax — they aren’t actually buying real property.
Attorney Fees: $1,500 to $3,000
Buyers can expect to pay their attorney anywhere from $1,500 to $3,000 in fees. You can find attorneys who will charge more or less, but we’ve found that most attorneys price somewhere within this range. Additionally, when buying in a new development in New York, the buyer typically pays the fees of the seller's attorney.
Bank Fees: $2,000 to $3,000
If you’re getting a mortgage on your new home, expect to pay your bank somewhere between $2,000 and $3,000 in fees. These fees include the property’s appraisal and your bank attorney’s fee.
Building Fees: $1,000 to $2,000, depending on the building
Most co-ops and condos in New York charge buyers certain fees as part of the purchase process (including move-in fees, board application fees, etc.).