Let’s talk about the part of buying a home that no one posts about on Instagram: closing costs. In New York City, they add up fast—and often take first-time (and even second-time) buyers by surprise.
Here’s what you need to know before you fall in love with that condo with skyline views or a townhouse with original moldings. These are the major costs to plan for:
Mortgage Recording Tax (But Only if You’re Buying Real Property)
If you’re buying a condo or townhouse and taking out a mortgage over $500,000, you’ll pay a 1.925% tax on the loan amount. If your mortgage is under $500,000, the rate drops slightly to 1.8%.
Buying a co-op? Good news: you’re off the hook. Since you're buying shares in a corporation (not the physical apartment itself), this tax doesn’t apply.
The “Mansion” Tax (Cue Eye Roll)
In NYC, even a one-bedroom walk-up can trigger the infamous Mansion Tax—a 1% surcharge on any home sold over $1 million. That’s right: $1,000,001 and you’re taxed like Gatsby.
And it doesn’t stop there. This tax increases with the sale price, scaling up in eight tiers all the way to 3.9% for homes priced over $25 million.
Pro tip: We always include a handy chart for this—because the math can get spicy and you need to know the hurdles before you make an offer.
The Flip Tax (Spoiler: It’s Not a Government Tax)
This one sounds official, but it’s actually a building-imposed fee—typically by a condo or co-op board—to help bolster their reserve fund.
Usually it’s paid by the seller, but sometimes a board will shift the cost to the buyer, especially if they hit resistance from current owners. Either way, it’s negotiable.
Important: Not every building has one. But many do—so this is something to ask about early in your due diligence. It’s building-specific.
Transfer Taxes (Usually the Seller’s Job—Unless It’s New Dev)
In most resale transactions, transfer taxes are paid by the seller.
But if you’re buying in a new development, the rules change. Developers often pass this cost on to the buyer. These taxes range from 1.4% to 2.075% of the purchase price depending on the amount.
Yes, we always give our buyers a chart here too—because again, math.
New Development = New Line Items
Buying new construction? Along with transfer taxes, you’ll also likely cover:
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Sponsor’s Attorney Fee: Often higher than your own legal costs. You're only paying the portion of the bill which relates to your transaction.
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Working Capital Fund Contribution: Usually 1–3 months of common charges.
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Live-in Super Contribution: Sometimes requested (yes, even the super’s apartment comes at a price but most agree a live-in super is worth the price).
The good news? These costs will be disclosed upfront—before you make an offer—so no surprises if you're working with an experienced agent (hi, that’s me).
Your Attorney’s Fee
A good NYC real estate attorney is worth their weight in gold. They’ll handle the contract, due diligence, and make sure the closing goes smoothly.
Expect to pay $3,000–$5,000 for a standard deal. Worth. Every. Penny.
Bank Fees
When you get pre-approved, your lender will give you a full breakdown of fees. Common ones include:
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Appraisal fee
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Bank attorney fee
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Possibly others, depending on the lender and how your loan is structured.
Application Fees from The Managing Agent
Whether it’s a condo or co-op, you’ll pay to submit and process your purchase package. Fees typically range from $500–$1,200 and may also include an additional charge for:
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A credit/background check
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Non-refundable application fees
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Move-in deposit (refundable, if you don’t scuff the hallway)
If your building uses a digital platform (like Domicile), tack on another $75–$100+ in tech-related fees.
Final Thoughts
Closing costs aren’t glamorous—but they are essential to understand upfront. With the right guidance, none of this needs to be stressful. If you’re thinking about buying, let’s talk early so we can run the numbers before you start touring.
That dream home will feel even better when you know what to expect long before closing day.
