Running numbers for a Central Park South purchase? If your target price is at or above $1,000,000, the NYC mansion tax is likely part of your closing budget. You want clarity before you wire funds, especially if you are purchasing from overseas or arranging financing. In this guide, you will see how the surcharge works, where it shows up in your budget, and how to model total cash needed at closing with simple, realistic examples. Let’s dive in.
What the NYC mansion tax is
The mansion tax is a state surcharge on residential real estate transfers at or above a statutory price threshold. The commonly referenced threshold is $1,000,000, and it is often expressed as a 1 percent surcharge on the purchase price when the threshold is met. It is separate from New York City and New York State transfer taxes and other customary closing costs.
The surcharge is typically collected at closing and is usually paid by the buyer unless your contract allocates it differently. It can apply to condo and co‑op purchases, single‑family residences, and certain residential interests when the purchase price meets the threshold. Because laws and interpretations can change, always confirm current rules and rates with the New York State Department of Taxation and Finance and the New York City Department of Finance, and review your contract with local counsel.
Why it matters on Central Park South
Central Park South, the corridor along 58th to 59th Streets, is one of Manhattan’s highest value addresses. Price points vary by building, views, and condition, but most purchases exceed the $1,000,000 threshold, which means the surcharge frequently applies.
Illustrative price bands for Central Park South:
- Entry‑level luxury: $1,000,000 to $3,000,000
- Mid‑luxury: $3,000,000 to $10,000,000
- High or trophy: $10,000,000 to $50,000,000 and above
Because the surcharge uses a percentage of price, it scales with your purchase. At the entry level, 1 percent is material to your closing funds. At the high end, the dollar impact can be very large, so planning matters.
Calculate your mansion surcharge
Use simple math for initial modeling. If your price is at or above $1,000,000, multiply the price by 1 percent to estimate the mansion surcharge.
- Formula: surcharge = purchase price × 1 percent
- Examples:
- $1,200,000 purchase → surcharge of $12,000
- $2,500,000 purchase → surcharge of $25,000
- $5,000,000 purchase → surcharge of $50,000
- $10,000,000 purchase → surcharge of $100,000
- $25,000,000 purchase → surcharge of $250,000
Always verify the current rate and how your deal defines consideration or purchase price. Your attorney and the official agencies listed above can confirm details.
Model your full closing budget
The mansion surcharge is only one line item. To see your true cash requirement at closing, add these common buyer costs and adjust based on your deal type.
- Mansion surcharge
- City and state transfer taxes, plus any recording taxes
- Mortgage recording tax and lender fees if financing
- Title insurance premium and related title charges where applicable
- Buyer attorney fees
- Bank related closing costs such as wires and processing
- Prepaid adjustments and prorations for property taxes and building charges
- Due diligence costs such as inspections or engineering where relevant
- Moving, relocation, and currency or international wire fees for cross‑border buyers
Example: $1,200,000 condo, all cash
- Mansion surcharge: $12,000
- Attorney and closing administration: $3,000 to $8,000
- Title and recording charges and documents: $2,000 to $6,000
- Prorations and small adjustments: $0 to $5,000
- Estimated additional cash at closing, beyond the purchase funds: roughly $19,000 to $31,000
Example: $2,500,000 condo, financed
- Mansion surcharge: $25,000
- Mortgage recording tax and bank fees: several thousand to tens of thousands, based on loan size and type
- Attorney and title: $5,000 to $20,000
- Prorations and escrows: $5,000 to $20,000
- Estimated additional cash at closing, excluding down payment and loan proceeds: roughly $50,000 to $100,000
Example: $10,000,000 trophy condo
- Mansion surcharge: $100,000
- Title insurance and closing related items: $30,000 to $150,000 or more
- Prorations and escrows: $10,000 to $100,000
- Estimated additional cash at closing: well into six figures beyond the purchase price and any down payment
Costs other than the surcharge do not always move in a straight line with price. Title premiums follow a published schedule, and some fees have minimums or jump at higher tiers. That is why a line‑by‑line budget helps you avoid surprises.
Step‑by‑step worksheet
Use this simple worksheet to estimate your Central Park South closing budget. Fill in estimates for your deal, then confirm with your attorney, lender, and title company.
- Start with your purchase price.
- Calculate mansion surcharge = purchase price × applicable mansion tax rate. Verify the current rate and threshold.
- Add any New York City and New York State transfer taxes that apply to your transaction.
- If financing:
- Add estimated mortgage recording taxes based on loan size and type.
- Add lender fees, appraisal, underwriting, and required title endorsements.
- Add buyer attorney fees based on a quote.
- Add title insurance premium and title company charges if applicable.
- Add prorated property taxes and building adjustments for common charges, assessments, or co‑op maintenance.
- Add moving, relocation, and foreign exchange or international wire fees if wiring from abroad.
- Total the items to find estimated buyer cash due at closing, separate from your down payment.
- Add a contingency buffer of 5 to 10 percent of these closing items for estimate variance.
Condo and co‑op considerations
Condo and co‑op purchases follow different processes in Manhattan, which affects budgets.
- Co‑ops often include board application fees, move‑in fees, and in some buildings a flip tax that is paid by the seller or buyer based on building rules and your contract.
- Many co‑op deals do not use title insurance in the same way as condos. Budgeting can differ.
- Confirm what applies in your building and who pays each cost. Your contract and building bylaws control these items.
Financing, foreign buyers, and credits
Financing and cross‑border details can shape both costs and timelines.
- Mortgage recording tax applies to many financed deals. Rates and exemptions vary by loan type and size. Ask your lender for a written estimate of all bank and recording charges.
- International buyers should plan for currency conversion costs, international wire fees, and documentation for bank compliance. Extra lead time helps avoid delays.
- Developers and some sellers may offer credits or concessions. These can reduce your out‑of‑pocket at closing, but they do not remove the legal requirement for taxes or fees. They only change who funds them.
- Ongoing ownership costs such as property taxes, common charges or co‑op maintenance, and utilities are not part of closing. Include them in your monthly planning.
Plan your Central Park South purchase
On Central Park South, most transactions will meet the $1,000,000 threshold, so the mansion surcharge is a standard part of your budget. The math for the surcharge is simple, but the rest of your closing costs depend on your building type, whether you finance, and the specifics of your contract. When you run the worksheet early and confirm each line with your attorney, lender, and title company, you can move from offer to closing with confidence.
If you want a quiet, numbers‑first conversation tailored to a particular Central Park South property, connect with Marcia Koutellos, REALTOR to review scenarios and next steps.
FAQs
Who pays the NYC mansion tax in Manhattan purchases?
- The buyer typically pays it at closing unless the contract states otherwise. Confirm payment responsibilities in your purchase agreement.
Does the mansion tax apply to both condos and co‑ops?
- Many residential transfers, including co‑op share purchases, can trigger the surcharge at or above the threshold. Verify the specifics for your deal with your attorney.
Is the mansion tax the only transfer cost I should plan for?
- No. City and state transfer taxes, mortgage recording taxes if you finance, title charges, attorney fees, and prorations are separate. Model them line by line.
Can I negotiate the mansion tax away with the seller?
- You can negotiate who funds closing costs, and some sellers or sponsors may offer credits. Negotiation changes who pays at closing, not the legal obligation to pay.
Where can I check current mansion tax rates and rules?
- Review official guidance from the New York State Department of Taxation and Finance and the New York City Department of Finance, and consult a local real‑estate attorney or CPA.
