The NYC mansion tax does apply to co-op purchases. Any cooperative apartment sold for $1 million or more triggers the tax, the buyer pays it at closing, and the combined rate runs from 1% up to 3.9% on purchases of $25 million and above. Buying shares in a housing corporation rather than a deeded unit makes no difference for this purpose.
Why Co-ops Aren’t Exempt
A co-op buyer acquires shares plus a proprietary lease, not a deed, and some buyers assume that structure keeps them clear of transfer taxes aimed at real property. It doesn’t. New York Tax Law Section 1402-a defines “residential real property” to include cooperative apartment units, which puts co-op transfers on the same footing as condos and houses.1New York State Senate. New York Tax Code 1402-A – Additional Tax The implementing regulation says the same thing in plainer terms: a cooperative apartment unit is residential real property subject to the additional tax.2Cornell Law Institute. N.Y. Comp. Codes R. and Regs. Tit. 20 575.3 – Additional Tax
How Much You’ll Owe
The mansion tax is actually two levies stacked together: a flat 1% under Section 1402-a on any residential transfer of $1 million or more,1New York State Senate. New York Tax Code 1402-A – Additional Tax plus a graduated supplemental rate under Section 1402-b that kicks in on NYC residential purchases at $2 million.3New York State Senate. New York Tax Code 1402-B – Supplemental Tax In practice, you only need the combined rate:4New York State Department of Taxation and Finance. Instructions for Form TP-584-NYC
- $1 million to under $2 million: 1%
- $2 million to under $3 million: 1.25%
- $3 million to under $5 million: 1.5%
- $5 million to under $10 million: 2.25%
- $10 million to under $15 million: 3.25%
- $15 million to under $20 million: 3.5%
- $20 million to under $25 million: 3.75%
- $25 million and above: 3.9%
Each rate applies to the entire purchase price, not just the portion above the bracket. That produces sharp cliff effects. A co-op selling for $999,999 owes nothing. At $1,000,000, the buyer owes $10,000. At $2,000,000, the bill jumps to $25,000 because the whole price is now taxed at 1.25%. A $10 million co-op triggers a $325,000 tax bill.5New York State Department of Taxation and Finance. Real Estate Transfer Tax If your negotiation is anywhere near a bracket boundary, a small price reduction can be worth real money.
How the Taxable Price Is Calculated
The tax is figured on the total consideration paid for the shares, which usually means the gross contract price. A few co-op-specific wrinkles come up often enough to flag.
The Building’s Underlying Mortgage Doesn’t Reduce It
Most co-op buildings carry a mortgage on the entire property, and your monthly maintenance includes a slice of the debt service. You might expect that underlying loan to reduce your taxable consideration. It doesn’t. The regulation forbids deducting any mortgage on the property owned by the cooperative corporation or any lien on the cooperative housing shares.2Cornell Law Institute. N.Y. Comp. Codes R. and Regs. Tit. 20 575.3 – Additional Tax The tax is calculated on the share purchase price alone.
Personal Property Allocations
Sales sometimes include furniture, built-in appliances, or other personal property, and buyers can allocate part of the consideration to those items to reduce the taxable amount. Both parties need to document the items separately and assign reasonable market values. State auditors scrutinize these allocations, so inflating a personal-property line to slip under a bracket boundary is a well-known move that invites problems.
Buying Two Apartments in the Same Building
If you’re purchasing two co-op units, whether they’re treated as one transaction depends on physical combination and use. Separate units in the same building are treated independently for the $1 million threshold as long as they’re not combined and not used in conjunction with one another.6New York State Department of Taxation and Finance. Additional Real Estate Transfer Tax – Application When More Than One Unit Is Transferred Two adjacent units bought to merge into one home get aggregated. Two separate investment units bought from the same seller in the same closing do not, even if the total crosses $1 million.
Buyer Pays, Seller Pays
The mansion tax is one of the few New York transfer taxes assigned directly to the purchaser. Section 1402-a puts liability on the grantee, and the supplemental tax under 1402-b follows the same rule.5New York State Department of Taxation and Finance. Real Estate Transfer Tax If the buyer fails to pay or claims an exemption they don’t qualify for, the seller becomes responsible, and liability is joint and several.1New York State Senate. New York Tax Code 1402-A – Additional Tax
Two other transfer taxes hit the same closing but generally fall on the seller. The base New York State transfer tax runs at $2 per $500 of consideration, roughly 0.4%.5New York State Department of Taxation and Finance. Real Estate Transfer Tax The New York City Real Property Transfer Tax applies to co-op share transfers and runs 1% at $500,000 or less and 1.425% above that.7Official Website of the City of New York. Real Property Transfer Tax Both are typically the seller’s obligation under standard contracts, though a purchase agreement can allocate them differently, so read the contract before signing.
Filing and Payment Deadline
Two returns cover the taxes on a NYC co-op purchase. At the state level, Form TP-584-NYC handles the base state transfer tax and the mansion tax together, and its instructions contain the supplemental rate table.4New York State Department of Taxation and Finance. Instructions for Form TP-584-NYC At the city level, you file the NYC-RPT return, designating the property as a cooperative unit.8Official Website of the City of New York. Real Property Transfer Tax Manhattan, Bronx, Brooklyn, and Queens filings go through ACRIS electronically. Staten Island uses paper. The filing fee for a co-op share assignment is $100.7Official Website of the City of New York. Real Property Transfer Tax
You have 30 days from the transfer date to file and pay, even when no tax is due. A five-day grace period runs before penalties begin. The penalty structure is aggressive: as of early 2026, interest on unpaid transfer taxes runs at 11%, compounded daily from the day after the due date, and a late-filing penalty is calculated on the unpaid tax and steps up once filing is 60 or more days overdue.7Official Website of the City of New York. Real Property Transfer Tax Pay the full tax within 30 days and the city won’t charge the late-filing penalty even if the return is late, only interest. Your closing attorney typically handles the filing within a few days of closing.
Federal Deduction and Cost Basis
The mansion tax is not deductible on your federal income tax return. The IRS classifies transfer taxes, sometimes called stamp taxes, as items you cannot deduct as a real estate tax.9Internal Revenue Service. Publication 530, Tax Information for Homeowners Buyers writing a five-figure check at closing sometimes assume the deduction is there and are surprised in April.
You can, however, add the mansion tax to your cost basis in the co-op. When you eventually sell, a higher basis reduces your taxable capital gain. On a $3 million purchase with a $45,000 mansion tax, that $45,000 folds into your basis. Hold on to the closing statement and tax receipts for as long as you own the apartment.