New York Applies Graduated Mansion Tax Rates to Homebuyers

New York homebuyers purchasing properties worth at least $1 million face a graduated mansion tax, with rates increasing alongside property prices. The state introduced the levy in 1989 to raise revenue during a recession, while a 2019 expansion applied higher rates to New York City purchases to help fund mass transit, according to Rockaway Times in an article published Oct. 8, 2026.

The tax is paid by the buyer and applies in addition to other closing expenses, including transfer taxes. The graduated structure means buyers of more expensive properties face higher rates than those purchasing homes near the $1 million threshold.

Under the rate schedule outlined by Rockaway Times, properties selling for less than $1 million are exempt. Purchases between $1 million and $2 million incur a 1% tax, while properties priced between $2 million and $3 million face a 1.25% rate.

The rate rises to 1.5% for properties valued between $3 million and $5 million. Homes priced between $5 million and $10 million face a 2.25% rate, with higher rates applying to properties above that range.

For a property purchased at $1.5 million, the 1% rate translates to a $15,000 mansion tax. That amount is separate from other closing costs associated with the transaction, according to Rockaway Times.

The 1989 tax was established under New York Gov. Mario Cuomo. Lawmakers expanded the tax structure in 2019, directing the increase specifically at New York City transactions to generate revenue for public transportation.

The original policy was intended to collect additional revenue from expensive real estate purchases, particularly high-priced Manhattan apartments. However, the tax applies to qualifying property transactions throughout New York City rather than exclusively to Manhattan apartments or purchases by foreign buyers.

A separate Washington Examiner headline published Oct. 9, 2026, characterized Los Angeles's mansion tax as having produced unintended consequences. The available text did not include the article's supporting details, leaving its specific claims and evidence unavailable for comparison with New York's tax structure.