Buying an apartment in Manhattan is an excellent long-term investment. Over time, you can grow your equity in one of the world's most exciting and profitable cities.

Times square

Whether purchasing your NYC home in

cash or using a mortgage, Manhattan real estate comes at a premium. On top of the selling price, you likely want to know how much you'll spend on closing costs. Keep reading for everything you need to know about New York City closing costs.

NYC Buyer Closing Costs

Buyers should plan to spend an additional 2% to 4% above the sale price for fees and taxes. 

However, these numbers aren’t etched in stone. You can negotiate a better deal by partnering with a skilled local real estate agent and a New York real estate attorney––and in an affluent market like NYC, those deductions can make a big difference for your bottom line. Read on to discover typical buyer closing costs and strategies for paying less at the closing table.

Mansion Tax

New York City buyers must pay a real estate transfer tax called a mansion tax for properties priced at $1 million or above––and with Manhattan median home prices at $1.020M, most buyers will be hit with this tax. The mansion tax has eight brackets based on the sale price, starting at 1% for a property 29th Street and 10th Avenuethat costs $1 million to $1,999,999 and goes up from there. The mansion tax caps off at 3.9% for a property costing $25 million or above. 


Buyers pay the same mansion tax percentage regardless of the size of the unit, which means NYC will tax buyers the same percentage for a 400-square-foot co-op costing $1 million as a 2,000-square-foot condo sold for $1,999,999 because it falls in the same sale price tax bracket. Likewise, at the highest bracket, the percentage stays the same for a home sold for $25 million or $250 million


The mansion tax can significantly increase closing costs from $10,000 to $975,000. However, if you’re lucky enough to find an apartment priced below $1 million, you’ll be scot-free of the mansion tax. The table below shows the mansion tax brackets and the percentages buyers pay according to their purchase price.


Purchase Price Brackets


Mansion Tax Amount

$1 million – $1,999,999


$10,000 – $19,999.99

$2 million – $2,999,999


$25,000 – $37,499.99

$3 million – $4,999,999


$45,000 – $74,999.99

$5 million – $9,999,999


$112,500 – $224,999.98

$10 million – $14,999,999


$325,000 – $487,499.97

$15 million – $19,999,999


$525,000 – $699,999.97

$20,000,000 – $24,999,999


$750,000 – $937,499.96

$25 million or higher


$975,000 +

NYC and New York State Transfer Taxes (for New Developments) 

If you buy a brand new co-op, townhouse, or condo directly from a sponsor or developer that costs $500,000 or higher, you must pay a NYC transfer tax of 1.425%. If the purchase price is below $500,000, the transfer tax will decrease to 1% of the purchase price. In addition, you’ll need to pay New York State a transfer tax of 0.04%. The New York State transfer tax jumps to 0.65% for new construction units sold for $3 million or more.


In some cases, buyers can negotiate with a developer or sponsor to pay a portion of the total tax. A homebuyer’s ability to do this successfully, however, depends on current market conditions and the developer’s selling goals. In a slower market with fewer buyers, some sponsors have paid buyer transfer taxes, buyer attorney fees, and other closing costs to help close a deal.

Attorney Fees

Most New York City real estate attorneys charge buyers a flat rate which buyers pay at closing. Attorney fees typically cost between $1,500 to $5,000 but can cost more for complex real estate transactions. One such transaction is combining apartments. Combining apartments can be time-consuming for an attorney because it requires submitting paperwork to condo and co-op boards, including but not limited to renovation plans and permits, and waiting for approval. Other issues that can complicate real estate transactions can include co-op sales with liquidity restrictions.

Mortgage Recording Tax (for Condos and Townhouses)

Borrowers taking out a mortgage owe additional taxes not paid by cash buyers, including New York City and New York State mortgage recording taxes. Borrowers pay a 1.8% mortgage recording tax on loans below $500,000 and a 1.925% tax on loans above $500,000. Keep in mind that a borrower pays taxes on the loan amount, not the purchase price.


Here’s an example: Say you put down a 20% downpayment ($300,000) on a condo that costs $1.5 million and finance $1.2 million. At 1.925%  you’ll pay a $23,100 mortgage recording tax. However, if you buy a home with a purchase price of $624,000 and a downpayment of $124,800, and finance the rest ($499,200) at 1.8%, the mortgage recording tax on the loan will cost $8,985.60


In addition to the mortgage recording tax, when taking out a mortgage, you’ll pay the following additional fees at closing:

  • Appraisal Fee – $500

  • Bank Attorney Fee – $1,000

  • Mortgage Application & Processing Fees – $500

  • Employment Verification and Credit Report – $100

  • Bank Loan Origination Fee – $800

  • Recognition Agreement Fee – $200 to $400

  • Title Search & Recording Fees – $1,000

Title Insurance (for Condos and Townhouses)

Title insurance protects buyers and lenders against liens and title claim issues on real property from previous owners. If you’re planning on buying a condo or townhouse, you’ll need to purchase title insurance. In fact, lenders won’t finance buyers without it. The price for title insurance varies from company to company. But as a general rule, in New York City, title insurance costs around 0.45% of the purchase price.  At that rate, a condo with a purchase price of $1.5 million, will cost $6,750 for title insurance.


Co-op buyers, on the other hand, aren’t required to purchase title insurance because they don’t actually own their apartments. Instead, cooperative buyers are shareholders that own shares in the cooperative corporation based on the total value of the apartment they buy based on the floor height, views, features, and amenities.

Building Fees

Condo and co-op boards charge various building fees for new buyers. A great Manhattan real estate agent like Jeff Cohen can inform you of the cooperative board fees as well as the co-op rules for prospective buyers. The following fees are typical building fees associated with new condo or co-op sales.


  • Move-in fees: Move-in fees typically cost around $1,000, however, the condo or co-op board will reimburse buyers when they move out, providing the buyer hasn’t damaged the unit.

  • Co-op attorney fee: Apart from paying your own real estate attorney for the transaction, you'll pay $1,500 for the board's attorney to review sale documents.

  •  Board application fee: New applicants pay an application fee to the managing agent that averages around $600. The board requires new applicants to submit several documents that the managing agent will collect and send to the board members. These documents include the income verification letter, purchase contract, bank statements, personal and professional reference letters, mortgage documents, and tax returns. 

Homeowner’s Insurance

The city of New York doesn’t mandate buyers to have a home insurance policy, but lenders, condos, and co-op boards will require you to cover your property. If you’re using a mortgage to buy your home, you must pay the first year in full when you close. For an apartment costing $1 million, coverage can range between $500 to $2,500 per year, depending on your coverage and apartment size. Check with your agent to find out more information.

How Buyers Can Save on Closing Costs

Reorganize the Deal in Your Favor

If the purchase price is a stone’s throw above the million-dollar mark, consult with your attorney to see if there’s a legitimate way to rework the deal with the seller to get the purchase price under $1 million, the threshold for the mansion tax. If you’re buying an apartment from a sponsor and the purchase price is just north of $500,000 or $3 million, the sponsor might be willing to restructure the deal so you can lower the transfer taxes, for example, paying a portion of the sponsor’s closing costs. Speak to a real estate attorney about your options.

Ask the Sponsor or Developer for a Closing Credit 

Sponsors and developers eager to sell a property fast could be open to providing a buyer with a closing credit to move the deal forward. Sometimes lowering the purchase price isn’t in the sponsor’s best interest if a lower sale price could impact offers on other units for sale. 

Apply for First-time Homebuyer Grants

 If you’re a first-time homebuyer, you could qualify for NYC and New York State grants to help decrease your closing costs. You can also apply the funds to your downpayment. The State of New York offers the following two grants to first-time home buyers.

Navigating NYC real estate transactions takes experience and skillful negotiation. If you’re considering buying or selling an apartment in Manhattan, message me or call (917) 719-1277 today.




  1. Mansion Global l Mansion Tax

  2. A closing cost guide for buyers and sellers in NYC l Brick Underground

  3. First-Time Homebuyer Programs in New York l New Home Source

  4. HomeFirst Down Payment Assistance Program l

  5. FAQs Regarding the Additional Tax on Transfers of Residential Real Property for $1 Million or More l Tax NY