Transfer Tax Variations by County and Municipality in New York

Overview

While the NYS Real Estate Transfer Tax applies uniformly statewide at 0.4% (with a 0.25% surcharge for residential sales of $3M+), additional local transfer taxes exist in certain jurisdictions beyond NYC. The most significant is the Peconic Bay Region Community Preservation Fund Transfer Tax on Long Island's East End, which adds 2% to the cost of real property transfers in five towns. Sellers in affected jurisdictions must account for these local taxes in net proceeds calculations and pricing strategies.

Key Strategy

Confirm all applicable transfer taxes with your closing attorney during the pre-listing phase to ensure accurate net proceeds modeling. In Peconic Bay Region transactions, model the buyer's total acquisition cost including the Peconic tax - although the buyer pays it, the added 2% reduces the buyer's effective purchasing power and compresses achievable prices. In all NYS jurisdictions, distinguish between taxes paid by the seller (NYS RETT) and taxes paid by the buyer (mansion tax, Peconic tax) but understand that buyer-side taxes indirectly affect your pricing.

What To Do

Calculate your specific transfer tax exposure based on your municipality. NYS RETT: 0.4% on all transfers, plus 0.25% surcharge for residential sales of $3M+. NYC RPTT: 1% (under $500K) or 1.425% ($500K+) - applies only within the five boroughs. Peconic Bay Region tax: 2% in Southampton, East Hampton, Shelter Island, Southold, and Riverhead, with exemptions for the first $250,000 (owner-occupied) or $100,000 (vacant land). NYS Mansion Tax: 1% to 3.9% based on purchase price, paid by buyer, for residential purchases of $1M+. Confirm any municipal transfer fees or recording surcharges with your closing attorney - these are typically small ($50 - $500) but vary.

Common Mistakes

Not accounting for the Peconic Bay Region tax in East End pricing strategy, which leaves the seller surprised when buyer offers come in lower than expected. Confusing buyer-side taxes with seller-side taxes and double-counting in net proceeds calculations. Not confirming municipal-specific transfer fees, which can vary even between adjacent towns. Referencing the repealed Real Property Transfer Gains Tax (eliminated in 1996), which occasionally appears in historical deed language but has no current applicability.

Frequently Asked Questions

Do transfer taxes vary by county in New York?

Yes - while the New York State transfer tax (0.4%) applies uniformly, many counties and municipalities impose additional local transfer taxes. The NYC transfer tax (1% - 1.425%) is the most well-known, but the Peconic Bay Region of Long Island imposes a 2% Community Preservation Fund tax on top of the state tax. Research your municipality's rates before pricing to accurately model net proceeds.

How much are transfer taxes outside NYC?

Outside NYC, you pay only the New York State transfer tax: 0.4% on sales under $3 million and 0.65% on sales of $3 million or more. Some counties and municipalities impose additional local taxes - notably in the Hamptons and parts of Westchester. Unlike NYC transactions, there is no city-level transfer tax. Check your municipality's requirements, as local surcharges can add 0.5% to 2% in certain high-value markets.

What is the Peconic Bay Region Transfer Tax?

The Peconic Bay Region Community Preservation Fund Tax is a 2% transfer tax on real property sales in five East End towns: Southampton, East Hampton, Shelter Island, Southold, and Riverhead. The first $250,000 is exempt for owner-occupied properties ($100,000 for vacant land). On a $3M East End sale, the Peconic tax alone is approximately $55,000. This is paid by the buyer but directly compresses what they can offer you.

Who pays which transfer tax in a New York sale?

The seller pays the NYS Real Estate Transfer Tax (0.4% statewide, 0.65% above $3M) and, in NYC, the city transfer tax (1% - 1.425%). The buyer pays the mansion tax (1% - 3.9% on residential purchases of $1M+) and the Peconic Bay tax (if applicable). Understanding this split is critical for accurate net proceeds modeling - seller-side taxes reduce your proceeds directly, while buyer-side taxes reduce the buyer's purchasing power and indirectly suppress what they can offer.

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This article provides general educational information only. It is not legal, tax, financial, insurance, compliance, housing, brokerage, or professional advice. Rules, tax rates, obligations, enforcement practices, and market conditions vary by property, building, contract, municipality, and jurisdiction, and they change. Sellers should consult a qualified attorney, CPA, or other appropriate professional before making decisions based on their specific situation.