The Single Biggest Difference: Mortgage Recording Tax
New York State and NYC charge a mortgage recording tax every time a mortgage is recorded against real property. Condo buyers pay this tax; co-op buyers do not — because a co-op share loan is personal property financing, not a real estate mortgage, so it's not subject to this tax.
The mortgage recording tax rates in NYC:
- Loans under $500,000: 1.8% of loan amount
- Loans of $500,000 or more: 1.925% of loan amount
On an $800,000 condo loan, that's $15,400 — paid entirely by the buyer, on top of all other closing costs. This is money a co-op buyer keeps in their pocket.
Buyer Closing Costs: Condo vs Co-op Comparison
| Cost Item | Condo | Co-op |
|---|---|---|
| Mortgage recording tax | 1.8–1.925% of loan | Not applicable |
| Title insurance (owner's) | ~0.45% of price | Not applicable (no deed) |
| Title insurance (lender's) | ~$1,000–$2,000 | Not applicable |
| Mansion tax (if $1M+) | 1%–3.9% of price | 1%–3.9% of price |
| Attorney fees | $2,000–$4,000 | $2,000–$4,000 |
| Lender fees | $1,500–$3,000 | $1,500–$3,000 |
| Board application fee | Rare / none | $500–$1,000 |
| Move-in fee/deposit | $500–$1,500 | $500–$1,500 |
| UCC filing / recognition agreement | Not applicable | $200–$500 |
| Inspection fee | $400–$700 | $400–$700 |
| Total (approx.) | 3–6% of price | 2–4% of price |
Cost Examples by Purchase Price
| Purchase Price | Condo Closing Costs | Co-op Closing Costs | Co-op Savings |
|---|---|---|---|
| $500,000 (20% down, $400K loan) | ~$15,000–$20,000 | ~$8,000–$12,000 | ~$7,000–$9,000 |
| $800,000 (20% down, $640K loan) | ~$25,000–$35,000 | ~$12,000–$18,000 | ~$13,000–$17,000 |
| $1,200,000 (20% down, $960K loan) | ~$45,000–$60,000 | ~$25,000–$35,000 | ~$20,000–$25,000 |
| $2,000,000 (20% down, $1.6M loan) | ~$90,000–$115,000 | ~$55,000–$75,000 | ~$35,000–$40,000 |
Note: The $1.2M example includes the 1% mansion tax ($12,000) and the $2M example includes the 1.25% mansion tax tier ($25,000). Mansion tax applies to both property types.
The Mansion Tax: Both Types Pay It
Purchases of $1 million or more trigger the NYC mansion tax, paid by the buyer. The rates are graduated:
| Purchase Price | Mansion Tax Rate | Tax on Full Price |
|---|---|---|
| $1,000,000–$1,999,999 | 1.00% | $10,000–$19,999 |
| $2,000,000–$2,999,999 | 1.25% | $25,000–$37,499 |
| $3,000,000–$4,999,999 | 1.50% | $45,000–$74,999 |
| $5,000,000–$9,999,999 | 2.25% | $112,500–$224,999 |
| $10,000,000–$14,999,999 | 3.25% | $325,000–$487,499 |
| $25,000,000+ | 3.90% | $975,000+ |
Co-op Seller Costs to Know
When selling a co-op, the seller typically pays:
- Flip tax: 1–3% of sale price (building policy — varies)
- NYC transfer tax: 1% on sales under $500K; 1.425% on sales $500K+
- NYS transfer tax: 0.4% of sale price
- Attorney fees: $1,500–$3,000
- Broker commission: Typically 5–6% total, split between agents
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NYC Paycheck CalculatorFrequently Asked Questions
Why are condo closing costs higher than co-op closing costs in NYC?
The biggest difference is the mortgage recording tax. Condo buyers pay 1.8–1.925% of the loan amount; co-op buyers are exempt because share loans are personal property. On an $800,000 loan that's $15,400 in savings for co-op buyers.
What is the NYC mansion tax?
A graduated tax on residential purchases of $1M or more, starting at 1% and rising to 3.9% for purchases over $25M. Both condos and co-ops are subject to it.
What closing costs does a co-op buyer pay in NYC?
Attorney fees ($2,000–$4,000), board application fee ($500–$1,000), move-in deposit ($500–$1,500), lender fees if financing ($1,500–$3,000), and miscellaneous fees. Total is typically 2–4% of purchase price.