Buying in Manhattan
What Buying Really Costs: Closing Costs and the Mansion Tax
Budget 2–5% of the purchase price on top of your down payment — more for new development. Here's where it goes.
Facts, figures and legal references on this page were verified against public sources in August 2026. Rules change; confirm anything decision-critical with your attorney or agent.
The down payment is only the headline number. Manhattan buyers pay closing costs of roughly 2–5% of the purchase price on top, and the mix depends heavily on whether you’re buying a co-op or a condo, with or without a mortgage.
The two big NYC-specific taxes
Mansion tax — paid by the buyer on any residential purchase of $1,000,000 or more. Progressive tiers run from 1% (at $1M) up to 3.9% ($25M+). It applies to the whole price, not the excess: $999,999 owes nothing, $1,000,000 owes $10,000. That cliff is why so many deals print at $999,999.
Mortgage recording tax — 1.8% of the loan on mortgages under $500,000, 1.925% at $500,000 and above. Condos and townhouses only: co-op buyers don’t pay it, because co-op shares aren’t real property. This is one of the co-op’s quiet financial advantages.
The typical buyer’s bill
| Item | Co-op | Condo |
|---|---|---|
| Mansion tax ($1M+) | 1–3.9% | 1–3.9% |
| Mortgage recording tax | — | 1.8–1.925% of loan |
| Your attorney | $2,000–4,000 | $2,000–4,000 |
| Bank fees, appraisal | $1,500–3,000 | $1,500–3,000 |
| Title insurance | — | ~0.4–0.5% of price |
| Building/managing agent fees | $2,000–5,000 | $2,000–5,000 |
| Lien search / UCC filing | a few hundred | — |
Co-ops skip both the mortgage recording tax and title insurance, which is why co-op closing costs run meaningfully lighter than condo ones — often 1–2% versus 3–5% with a mortgage.
New development: read the sponsor’s fine print
Buying from a developer (“sponsor unit”) traditionally means the buyer also picks up costs the seller normally pays — NYC and NY State transfer taxes (roughly 1.4–2.075% combined depending on price) and sometimes the sponsor’s attorney fee. These are negotiable in softer markets; make your attorney ask.
Sellers, for reference
Sellers pay the broker commission (typically 5–6% split between sides), transfer taxes, their attorney, and in co-ops usually a flip tax — a transfer fee to the building, commonly 1–3% (each building sets its own). Knowing the seller’s bill helps you read their negotiating position.
Rules of thumb
- All-in cash needed for a $1.5M condo with 20% down: roughly $300,000 down + ~$70,000–90,000 closing costs, before movers or renovation.
- Co-ops demand post-closing liquidity on top — many boards want to see 1–2 years of maintenance and mortgage payments in reserve after you close.