Taxed on the way out,
before the gain
Transfer taxes hit the gross price, profitable or not: city and state together take roughly 1.4% to 2%+ of a sale before capital gains are even calculated. The net sheet starts here.
Before you read on
- Rates as of August 2026 for NYC residential sales; verify current schedules at contract.
- Not tax advice.
- Foreign sellers stack FIRPTA on top — Section 4.
Point 1The two taxes and their rates
New York City's Real Property Transfer Tax takes 1% of residential sales at $500,000 or below and 1.425% above; New York State adds 0.4%, rising to 0.65% on residential sales of $3 million and up. Combined: 1.4% at modest prices, 2.075% on a $3 million-plus sale — of the entire price, off the top.
Custom assigns both to the seller in resales (the mirror of the buyer's mansion tax), with one large exception: sponsor sales shift transfer taxes to buyers by convention. Sellers of ordinary resales should never model their net without these lines; on a $2 million condo they are roughly $36,500 before anything else.
Point 2The seller's full deduction stack
The percentage framing clarifies decisions: a seller netting after 5-8% of exit costs needs price appreciation of that scale just to break even on a round trip — the arithmetic behind our standing advice that short holds must out-earn their friction.
| Line | Typical shape |
|---|---|
| NYC + NYS transfer taxes | ~1.4% – 2.075% of price |
| Brokerage commission | As negotiated in the listing agreement |
| Attorney and closing fees | Fixed thousands |
| Building fees / flip tax | Move-out, transfer agents; co-op flip taxes where levied |
| Loan payoff and satisfaction | Principal plus recording of the discharge |
| FIRPTA withholding (foreign sellers) | 15% of price held at closing, reconciled by filing |
Run the net sheet at listing, not at closing — pricing decisions depend on it.
Point 3Edge cases that change the bill
Transfers that look like non-sales can still tax: deeds between related parties, transfers into or out of LLCs and trusts, and consideration paid partly in assumed mortgages all have transfer-tax treatments that surprise the unadvised — some exempt, some taxed on the debt assumed. Estate-planning moves especially deserve a transfer-tax check before recording anything.
Mixed-use and multi-unit sales price differently: commercial rates run higher (NYC's 2.625% above $500,000), and a townhouse with a store below can straddle classifications. The classification argument is worth having before contract, through counsel, because the recording clerk will not have it for you.
Point 4Foreign sellers: the stacked exit
Non-resident sellers pay the same transfer taxes plus the FIRPTA machinery: 15% of the gross price withheld at closing against capital-gains liability, reduced or recovered through withholding certificates and the eventual return. New York State adds its own estimated-tax prepayment for non-resident sellers at closing on the gain.
The planning is calendar, not avoidance: file the withholding-certificate application as the contract signs, have the ITIN already in hand, and model the months between closing and refund into liquidity plans. Foreign sellers who start FIRPTA paperwork at listing keep tens of thousands from sitting at the IRS for a year.
By custom the seller, in resales — city and state together at roughly 1.4% to 2.075% of price. Sponsor sales shift them to buyers by convention.
No — on the full sale price regardless of gain or loss. A break-even sale still pays them, which is why round-trip friction belongs in every holding-period decision.
NYS's residential rate steps from 0.4% to 0.65% at $3 million and up, on the whole price — a bracket cliff worth remembering when pricing near the line.
Frequently yes, depending on structure and consideration including assumed debt. Estate-planning transfers deserve a transfer-tax review before recording — surprises here are expensive.
FIRPTA withholding at 15% of gross plus New York's non-resident estimated tax at closing — both reconciled by filings. Certificates and early ITINs compress the cash-flow pain.
They adjust the capital-gains computation as selling expenses rather than deducting currently. Your preparer nets them in the gain math.
RELATED GUIDES
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Important notice
The figures on this page are general information as of August 2026 and do not represent an offer, a quote, or a guarantee of any transaction terms. Reinvent NY does not provide legal, tax, or investment advice. Confirm anything material with an attorney and a CPA before you act on it. Nothing here is a solicitation to invest, and no return is promised. Real estate brokerage services are provided through R New York.