The NYC mortgage recording tax runs 2.05% of the loan amount for most residential mortgages under $500,000 and climbs to 2.175% or 2.80% above that threshold, depending on the property type. The tax is paid at closing on every mortgage recorded against real property in the five boroughs, and the combined rate is among the highest in the country. On a $700,000 condo loan, the bill comes to roughly $15,225.
What You Actually Pay
Four separate taxes stack into one line on your closing statement. A basic state tax of 0.50% applies to every mortgage.1New York State Senate. New York Tax Law 253 – Recording Tax A special additional state tax adds 0.25%.2New York Codes, Rules and Regulations. 20 CRR-NY 642.3 – Imposition of the Special Additional Tax A Metropolitan Commuter Transportation District surcharge adds another 0.30% because all five boroughs sit inside the MCTD. The fourth and largest piece is the NYC local tax authorized by Tax Law Section 253-A, which varies by property type and loan size.3New York State Senate. New York Tax Law 253-A – Tax
How the Rate Changes at $500,000
For any mortgage under $500,000, the NYC local component is 1.00%, so the combined rate works out to 2.05% across all property types. A $400,000 mortgage produces an $8,200 tax bill.
At $500,000 and above, the local rate splits:
- One-, two-, or three-family homes and individual condo units: the local rate rises to 1.125%, for a combined 2.175%.
- All other property, including commercial buildings and apartment buildings with four or more units: the local rate jumps to 1.75%, for a combined 2.80%.3New York State Senate. New York Tax Law 253-A – Tax
A $750,000 mortgage on a Brooklyn brownstone costs $16,312.50 in tax. The same loan amount on a small commercial building costs $21,000. The gap catches buyers off guard when they assume residential and commercial rates are comparable.
Splitting a loan to stay under the $500,000 threshold does not work. If multiple related mortgages involving the same or related borrowers are recorded within a twelve-month window, the city aggregates them to determine the applicable rate tier.3New York State Senate. New York Tax Law 253-A – Tax
Who Writes the Check
The borrower pays nearly all of it. The 0.50% basic tax, the 0.30% MCTD surcharge, and the NYC local tax all sit on the borrower’s side of the closing statement. The 0.25% special additional tax is the one piece the law shifts to the lender, but only on mortgages secured by residential property with six or fewer units.1New York State Senate. New York Tax Law 253 – Recording Tax
Two wrinkles affect that split. If the lender is a nonprofit exempt under Section 501(a) of the Internal Revenue Code, the lender’s obligation to pay the special additional tax disappears and the borrower absorbs the 0.25%. If the lender is a credit union or a natural person lending on a one- to six-family residential property, the special additional tax is not owed at all, which trims the combined rate.1New York State Senate. New York Tax Law 253 – Recording Tax
Co-ops Skip the Tax Entirely
Buying a cooperative apartment avoids the mortgage recording tax altogether. A co-op purchase is a sale of shares in a corporation along with a proprietary lease, not a transfer of real property, and a co-op loan is secured by those shares under a UCC security agreement rather than a mortgage recorded against land. With no mortgage to record, the tax does not apply.4NYC Department of Finance. ACRIS Recording Fees and UCC Statements
The lender files a UCC-1 financing statement instead. The filing fee is $40 on paper or $20 electronically. On a $500,000 purchase, that is the difference between about $20 in filing costs and roughly $10,250 in mortgage recording tax, which is one of the real cost advantages a co-op holds over a comparable condo.
Cutting the Bill on a Refinance With a CEMA
The most effective way to reduce the tax is a Consolidation, Extension, and Modification Agreement, known as a CEMA, used when refinancing an existing mortgage. Rather than satisfying the old loan and recording a brand-new one, the existing lender assigns its mortgage to the new lender, who consolidates the two liens. Tax is owed only on the difference between the new loan balance and the unpaid balance of the old one.5New York State Senate. New York Tax Law 255 – Supplemental Mortgages
The arithmetic is lopsided in the borrower’s favor. A refinance from a $380,000 remaining balance into a $390,000 new loan would ordinarily trigger about $7,995 of tax at 2.05%. With a CEMA, the tax applies only to the $10,000 of new money, dropping the bill to $205 before any CEMA processing or assignment fees charged by the lenders. Both lenders have to agree to the assignment, and some charge enough to eat into the savings, but on a typical NYC refinance the net benefit still runs into the thousands.
Smaller Exemptions and Carve-Outs
If you are buying or refinancing a one- or two-family home, the first $10,000 of the mortgage is exempt from the MCTD additional tax, which saves exactly $30 at the 0.30% rate.1New York State Senate. New York Tax Law 253 – Recording Tax The exemption does not apply to three-family homes, condos, or commercial properties, and it does not apply to a CEMA that modifies a prior mortgage originally securing $10,000 or more, which covers essentially every NYC mortgage.6New York State Department of Taxation and Finance. $10,000 Residential Property Exclusion on Certain Mortgages
Full exemptions exist for a narrow set of borrowers and lenders: the federal government, New York State, and their agencies and political subdivisions, to the extent they have sovereign immunity, along with voluntary nonprofit hospital corporations and specified housing entities organized under the Private Housing Finance Law.7Legal Information Institute. 20 NYCRR 644.1 – Exemptions A standard 501(c)(3) charity does not automatically qualify. Individual homebuyers and ordinary private corporations do not qualify unless they are participating in one of the specific housing programs the regulations list.
Filing and Payment Mechanics
Mortgages in Manhattan, the Bronx, Brooklyn, and Queens are filed and taxed through the Automated City Register Information System, or ACRIS, run by the Office of the City Register. Staten Island is handled separately by the Richmond County Clerk at 130 Stuyvesant Place.8New York City Department of Finance. Recording Property-Related Documents Tax and recording fees can be paid through ACRIS by eCheck or credit card.9NYC Department of Finance. eRecording FAQ In practice, the closing attorney handles the entire filing, so most buyers never log in themselves.
If you are using a CEMA, the submission must include the recording date and document ID of the original mortgage along with a breakdown of the remaining principal, so the recording office can confirm the tax is being charged only on the new money.6New York State Department of Taxation and Finance. $10,000 Residential Property Exclusion on Certain Mortgages
What Happens If It Isn’t Paid
Nonpayment effectively kills the mortgage. A county clerk or city register cannot record it, and an unrecorded or improperly taxed mortgage cannot be received in evidence in court, cannot be foreclosed, and cannot be released or discharged of record.10New York State Senate. New York Tax Law 258 – Effect of Nonpayment of Taxes That is why lenders insist the full tax clear at closing: an untaxed mortgage is an unenforceable one.
Where a mortgage is somehow recorded without the full tax paid, interest accrues on the shortfall at the rate set under Tax Law Section 1096(e), compounded daily. If the instrument did not make it apparent that tax was owed, a penalty of 10% of the unpaid tax applies for the first month and 2% for each additional month, capped at 25%. The commissioner can waive the penalty when the mortgage was recorded in good faith and the recording officer initially treated it as nontaxable, but the interest cannot be waived.10New York State Senate. New York Tax Law 258 – Effect of Nonpayment of Taxes