2020 NY Budget Bill - Additional New York State Transfer and Mansion Tax - Effective July 1, 2019

The 2020 New York State Budget Bill includes increases to the New York State Transfer and Mansion taxes, which affect real property in New York City as well as any other city in New York State with populations of one million or more.  In addition to the $2.00 per $500.00 of consideration (or fraction part thereof) of New York State Transfer Tax, the new law adds an addition $1.25 per $500.00 of consideration, (or fraction part thereof) on residential property (see Note 1 below) where the consideration is three million dollars ($3,000,000.00) or more, or on the consideration on other property (not residential) of two million dollars or more ($2,000,000.00).  This tax is paid by the seller and subject to the exemptions and conditions contained in the New York State Tax Law.

Consideration	Transfer Tax Residential	Transfer Tax Non-Residential
Under $2,000,000.00	$2 per $500 (.4%)	$2 per $500 (.4%)
$2,000,000 to $3,000,000.00	$2 per $500 (.4%)	$3.25 per $500 (.65%)
$3,000,000.00 or more	$3.25 per $500 (.65%)	$3.25 per $500 (.65%)

The Bill also adds, in addition to the 1% tax on consideration of residential (only) real property, in excess of $1,000,000.00 (commonly known as the Mansion Tax) additional supplemental Mansion taxes.  The supplement Mansion tax is on residential only property (see Note 2 below) located in New York City or a city in New York State with a population of one million or more. The supplemental Mansion tax increases based upon the amount of consideration.  This tax is paid by the Buyer. 

Consideration	New York Mansion Tax (including Supplemental Mansion tax)
$1,000,000.00 or less	Not subject to tax
$1,000,000.00, to 1,999,999.99	1%
$2,000,000.00 to 2,999,999.99	1.25%
$3,000,000.00 to 4,999,999.99	1.5%
$5,000,000.00 to $9,999,999.99	2.25%
$10,000,000.00 to $14,999,999.99	3.25%
$15,000,000.00 to $19,999,999.99	3.5%
$20,000,000.00 to $24,999,999.99	3.75%
$25,000,000.00 or more	3.9%

The New Transfer and Mansion Tax rates take effect on July 1, 2019 for conveyances occurring on or after July 1, 2019.  If you close after the effective date but can prove you entered into a binding contract as confirmed by independent evidence such as the recording of the contract, payment of the contract deposit or other facts and circumstances, determined by the Commissioner of Taxation and Finance the parties will be permitted to pay the current rates.   If you enter into a contract today, but close, record and pay the transfer tax by June 30, 2019, you will also pay the current rates.   

Please note the definitional changes made to New York Tax Law Section 1402. Section 1402 of the New York State Tax Law as amended by the Budget Bill has changed the definition of residential real property to included 1, 2 or 3 family dwelling, an individual condominium unit or a cooperative apartment that is or may be used in whole or in part as a personal residence:  

Section 1402-b Supplemental (Mansion Tax) tax definition of residential real property shall include 1, 2 or 3 family dwelling, an individual condominium unit or a cooperative apartment that is or may be used in whole or in part as a personal residence. 

The new Transfer and Mansions taxes shall be paid in the same fashion as the current New York State Transfer and Mansion Taxes.