Stamp Duty, Closing Costs and New York Property

Posted by Wei Min Tan on March 14, 2022

Stamp duty is a British term and is not a term used in New York property transactions. Here in the United States, we use the term Closing Costs, which is more comprehensive and covers all the transaction cost items, including government taxes (stamp duty).

Closing costs are the same for foreign buyers and local U.S. citizens.  There is no extra stamp duty or taxes levied on foreign buyers.  Here is an outline of Closing Costs when buying or selling a condominium apartment in New York.

Closing Costs for Buyer

• Mortgage tax – paid to the government and only if there is a mortgage involved, about 2% of loan amount.
• Title insurance – this is insurance to ensure the new owner will have clean title, about 0.5 percent of property price.
• Attorney fees, $3,000 to $5,000.
• Mansion tax – $1M-$1.99M = 1% of price, $2M-$2.99M = 1.25% of price, $3M-$4.99M = 1.50% of price, $5M-$9.99M = 2.25% of price, $10M-$15M = 3.25% of price.
• Recording and search fees, approx. $2,500.
• Board Package, Bank, Managing Agent fees etc.

Closing Costs to the Buyer is about 5-6 percent of the loan amount if there is financing. If there is no financing, Closing Costs are about 2 percent of property price.

Read about Wei Min’s style in Best Manhattan property agents and Role of a buyer’s broker. 

Closing Costs for Seller

• Broker commission – this is usually 6 percent of price and split 50/50 between Buyer’s and Seller’s agents.
• New York City/State transfer tax, 1.825% of price for property <$3M, 2.075% of price for property above $3M.
• Attorney fees, $3,000 to $5,000.
• Misc recording and filing fees.

Closing Costs to the Seller is about 8 percent of sale price.

Weimin’s article, Investing in a Manhattan penthouse apartment

What We Do

We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale

Deal Examples

1) Halcyon in Midtown East.  Represented multiple buyers with deals between $1.7 million to $5 million.  Reserved property at pre-construction stage with 20 percent down.  Balance at closing 2 years later.  Apartment has been rented with high rents since then.  Located close to the United Nations, Citigroup Center, Blackstone, Blackrock, JP Morgan Chase.

2) 300 E 64 St, Upper East Side.  Top amenity building in the 60s with an amazing roof deck with BBQ grill (pictured), a WOW factor for tenants.  At purchase, the Q subway line extension was in progress and it is now completed.

3) 88 Greenwich, 35th floor waterview one bedroom apartment facing south.  A high floor, south facing, water view is the most desirable view in Manhattan.  While most water view apartments are located further from the subway, this building has a subway station right in front of it.  Property purchased with long term tenant in place hence no vacancy related to finding a new tenant.

Notes:

This article was updated March 14, 2022

Always consult your tax or legal professional as individual circumstances vary.

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