What is the NYC Mortgage Recording Tax?

What is the NYC Mortgage Recording Tax?

The NYC mortgage recording tax is one of the largest closing costs NYC homebuyers pay when using a mortgage to finance a large portion of their property purchase. You are probably thinking, “Oh great, more taxes.” Not to worry!  We’ve outlined below some helpful information to better understand how much you will pay, when the tax is applicable, and how you can offset the mortgage recording tax with the savings of a commission rebate.


Mortgage Recording Tax NYC


How much is the mortgage recording tax NYC buyers pay?

The mortgage recording tax requires purchasers to pay 1.8% on mortgage amounts under $500,000 and 1.925% on mortgage amounts above $500,000 in NYC (this includes the recording tax for both NY State and New York City). It is important to note that this is based on the loan amount and not the purchase price.

Yes, that’s a significant chunk of money coming out of your pocket and is unfortunately paid upfront. For example, if you bought the average condo in Manhattan for $2,000,000 (crazy to think, but that’s the average!), with a 20% down payment, you should expect to pay 1.925% on the $1,600,000 loan amount or roughly $30,800 for the mortgage recording tax alone.


Co-ops are the exception to the rule

If you are buying a co-op in NYC, you are in luck – you will not have to pay a mortgage recording tax. When purchasing in a co-op, you are actually buying shares in the corporation that owns the co-op and you have a proprietary lease on the apartment unit in the building. As a result, co-ops are not considered real property, and since the co-op loans are secured by the shares in the corporation they are not subject to the recording tax.

Condos, single family homes, and multi-family homes are classified as real property and will be subject to the mortgage recording tax on any loan amounts. You can estimate what you can expect to pay with our NYC Closing Costs Calculator.


Offset the NYC mortgage recording tax with a commission rebate

Nobody likes paying taxes, but if you find yourself having to shell out extra money for the mortgage recording tax, you can offset this tax with the cost-saving strategy of a buyer commission rebate.

Receiving a commission rebate allows you to get cash back from your real estate broker. With Prevu’s Smart Buyer™ Rebate, you receive a commission rebate of two-thirds of the commission Prevu receives for representing you as a buyer's broker. For example, if you buy a $2,000,000 condo with 20% down payment, your commission rebate totals up to 2% of the purchase price. That’s a savings of $40,000 that you can use to offset all of your $30,800 mansion tax and then some.

As always, the Prevu Team is here to help if you have any questions. You can reach us at prevuteam@prevuapp.com or (646) 603-6868.

Categories: Buyer

Related Articles

Despite having to pay sky high prices for apartments in NYC, some buyers may not realize that there are additional closings costs they haven’t considered. The extra costs can really add up, especially for condos.
August 06, 2018
When you make an offer to buy an apartment in NYC, there is no guarantee that the offer will be accepted. Here are expert tips to increase your chance of success.
July 06, 2018
When you decide you want to begin your search for a NYC apartment, it’s important to understand what type of apartment buyer you are in order to succeed.
July 24, 2018