Breaking · Policy

NYC Mansion Tax Could Spike to 5.3%, What Luxury Buyers and Sellers Need to Know Now

· William Luxe New York ·

The New York State Senate and Assembly have both included significant mansion tax increases in their 2026 budget proposals, and if signed into law, the impact on luxury transactions above $5 million will be substantial.

Here are the proposed new transfer tax rates for residential properties:

To put this in dollar terms: on a $10 million purchase, the buyer's mansion tax would increase from approximately $325,000 to $367,500, an additional $42,500 at closing. At $25 million, the jump is even more dramatic.

Important context: the rates below $5 million are not changing. There was confusion on social media about rates applying to $500K+ sales, those are existing rates that were simply listed in the same bill section. The Senate, Assembly, and the Citizens Budget Commission have all confirmed this.

Mayor Mamdani has also proposed a separate 1% property tax surcharge on residential properties valued over $5 million, plus a 1% real property transfer tax on all-cash transactions over $1 million. Neither of these have been included in the legislative proposals yet, but they signal the direction of policy.

What this means for buyers and sellers right now: If you're considering a purchase above $5 million, the window before these rates potentially take effect is a factor worth discussing with your attorney. For sellers, understanding how increased buyer costs at these price points may affect demand and pricing strategy is critical. The threshold dynamics we already advise on, pricing just below tier cutoffs, become even more important as the dollar amounts get larger.

We're tracking this legislation through the budget negotiation process and will update this analysis as it develops. Governor Hochul has not yet supported these increases, so the final rates, if any, may differ from what's been proposed.

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