Despite NYC's notoriety for being a high-tax market, demand in Manhattan is strong, especially in the $2-3 million purchase range. We notice many clients choosing to maintain a primary residence in FL or NJ, and a smaller pied-à-terre in the city for logistical purposes.
Below, we break down exactly what to kind of fees and taxes to expect when buying in Manhattan.
A general budget is 2% to 6% of the price for closing costs, depending on whether the purchase is all cash or financed. Some fees are state-based, some are city-based.
1. Mansion Tax (Paid by the Buyer)
New York State imposes a "Mansion Tax" on purchases of $1 million or more (sliding scale):
- $1,000,000 to $1,999,999 - 1.00%
- $2,000,000 to $2,999,999 - 1.25%
- $3,000,000 to $4,999,999 - 1.50%
- $5,000,000 to $9,999,999 - 2.25%
- $10,000,000 to $14,999,999 - 3.25%
- $15,000,000 to $19,999,999 - 3.50%
- $20,000,000 to $24,999,999 - 3.75%
- $25,000,000 and above - 3.90%
This is a one-time tax due at closing.
2. Mortgage Recording Tax (If Financing)
New York City charges a Mortgage Recording Tax of approximately 1.925% of the mortgage amount.
For example:
- $1,000,000 mortgage: approximately $19,250 tax
- $1,500,000 mortgage: approximately $28,875 tax
3. Attorney, Title, and Closing Costs
Condo buyers should also expect:
• Attorney (mandatory in NY) fees: approximately $2,500-$5,000
• Title insurance and title-related expenses: approximately 0.4%-0.5% of the purchase price
• Recording and miscellaneous closing fees
**Some of these costs are not required for co-op purchases because buyers acquire shares in a corporation rather than real property.
4. Monthly Carrying Costs
• In a condo, expect common charges of approximately $1.50-$2.50 per square foot annually
• Condos have a separate real estate tax bill paid by the owner.
So, for a typical 2-3 bedroom condo, monthly condo fees range from approximately $2,000-$4,000 per month depending on size, services, and tax abatements (rare).
Taxes would be $24,000-$36,000 annually ($2,000-$3,000/month)
Thus, total monthly carry $4,000-$7,000/month (not including a mortgage)
Similarly, for a 2-3 bedroom co-op, you could expect maintenance charges of approximately $3,000-$8,000+ per month. With co-ops, however, maintenance includes the building's underlying real estate taxes, so you don’t have a separate tax bill.
5. NEW Pied-à-Terre Tax
Beginning in 2026, New York enacted a new annual Pied-à-Terre Tax on units that are not the owner's primary residence.
The tax generally applies to second homes and investment residences with assessed values above certain thresholds and is intended to target luxury properties ($5M+) that are not owner-occupied full-time.
For buyers who plan to make the property their primary residence, this tax is generally not a concern.
The Pied-à-Terre Tax creates additional uncertainty for some co-op owners because assessment is not as straight forward as with condos.
• Many co-op shareholders do not receive a separate property tax bill.
• The tax may apply even when a shareholder has no practical ability to challenge or control the building's tax assessment.
• Many co-op boards are still evaluating how compliance and administration will work under the new law.
So in general,
Condominiums offer:
• Greater flexibility
• Easier financing
• Ability to rent the apartment in the future
• More predictable ownership rights
Co-ops offer:
• Lower purchase prices per square foot
• Potentially lower overall costs
• Some restrictions on ownership
• Mortgages generally not allowed
For more information on NYC deal structure and taxes, listen to the BUILT DIFFERENT episode linked below:
