You’ve saved for the down payment. You’ve found the apartment. Your offer has been accepted.

But there’s another number every NYC buyer should prepare for: closing costs.

Depending on the property and financing, buyers may want to budget roughly 2%–5% of the purchase price for closing costs, with certain transactions—particularly new developments and higher-priced properties—potentially costing more.

The Mansion Tax

Despite its name, you don’t need to buy a mansion to pay the mansion tax.

New York’s mansion tax begins at $1 million and is generally paid by the buyer.

The base tax is 1%, but NYC residential purchases of $2 million or more are subject to additional supplemental rates that increase with price. The combined mansion-tax burden can therefore rise from 1% to as much as 3.9% at $25 million and above. (NY State Taxation & Finance)

For example:

$1,500,000 purchase × 1% = $15,000 mansion tax.

Mortgage Recording Tax

Financing a condo or house in NYC can trigger another significant expense: mortgage recording tax.

The tax applies to the mortgage amount, not the purchase price. (New York City Government)

Importantly, traditional co-op financing generally isn’t subject to mortgage recording tax because co-op ownership is structured differently from ownership of real property.

Attorney Fees

NYC buyers typically hire their own real estate attorney. A reasonable planning estimate might be approximately $2,500–$5,000+, depending on the transaction.

Lender and Financing Costs

Financed purchases can include appraisal fees, credit-related charges, bank attorney fees, origination or underwriting costs, and other lender expenses.

Your lender should provide a Loan Estimate detailing expected financing costs.

Title Insurance vs. Co-op Lien Search

Condo and townhouse buyers generally purchase title insurance, while co-op transactions typically involve a lien search rather than traditional title insurance.

Costs depend heavily on the purchase price and transaction.

New Development Purchases

This is where buyers need to be especially careful.

In some NYC new-development transactions, the sponsor may negotiate for the buyer to cover expenses that a seller would traditionally pay, potentially including sponsor transfer taxes and legal fees.

Those expenses can add tens of thousands of dollars to a purchase.

The Bottom Line

Don’t determine your maximum purchase price based solely on your down payment.

Before making an offer, understand your estimated cash to close:

Down Payment + Closing Costs + Required Reserves = Your True Cash Requirement

A knowledgeable real estate agent, lender, and attorney can help you estimate these expenses before you commit to a property.

Planning to buy in NYC? I can help you build a realistic purchase budget and connect you with experienced lenders and attorneys before you begin your search.

Disclaimer: “Figures are estimates for informational purposes only and are subject to change. Consult your attorney, lender, tax advisor, contractor, or other appropriate professional regarding your specific transaction.”