NYC Affordability

The RPTT is the city’s cut of a sale. The NYC Department of Finance applies it to sales and transfers of real property in the city when the consideration is more than $25,000, and it explicitly covers transfers of co-op shares too, so the “co-ops aren’t real property” exemption that saves co-op buyers from the mortgage recording tax doesn’t help here. For residential transfers (a one- to three-family house, an individual condo unit, or an individual co-op apartment), the rate is 1% of the price at $500,000 or less and 1.425% above $500,000. Other property types pay more (1.425% and 2.625%).

The city Administrative Code puts the tax on the grantor, meaning the seller, with the buyer liable only if the seller doesn’t pay or is exempt. On an ordinary resale that’s how it shakes out. The common exception is market practice, not law: on new-development and sponsor sales, contracts commonly shift the seller’s transfer taxes onto the buyer. The return is filed and the tax paid within 30 days of the transfer, usually as part of the closing.

Two details are easy to miss. First, the higher rate isn’t marginal: cross $500,000 and the whole price is taxed at 1.425%, not just the part above the line. Second, the RPTT is only the city layer. The state charges its own NYS Real Estate Transfer Tax on top, also generally seller-paid, and a separate buyer-paid mansion tax at $1 million and up.

Worked example

A seller closing on a $750,000 condo is above the threshold, so the RPTT is $750,000 × 1.425% = $10,687.50. Add the state’s 0.4% ($3,000) and the seller’s combined transfer tax is $13,687.50.

The cliff at $500,000 is where it gets silly. A $500,000 sale owes $5,000 in RPTT. A $510,000 sale owes $510,000 × 1.425% = $7,267.50, so $10,000 more in price costs $2,267.50 more in city tax. See every seller cost in order on the seller closing costs guide, or run your own numbers on the Sale Net Proceeds Calculator.