Mortgage Recording Tax New York: Rates, NYC Calculator, and the Co-op Exemption

Most states don't tax you for the act of borrowing money to buy a home. New York does. The Mortgage Recording Tax (MRT) is levied on the recording of your mortgage document with the county clerk — and in New York City, it's one of the largest single line items on a buyer's closing statement.

Here's what it is, how much it costs, and why co-op buyers pay nothing while condo buyers can owe $15,000 or more.

What Is the Mortgage Recording Tax?

When a buyer finances a real property purchase in New York, the mortgage document is recorded with the county clerk as a public lien against the property. New York charges a tax on this recording. The MRT is calculated as a percentage of the loan amount — not the purchase price — and is the buyer's responsibility at closing.

The key phrase is "real property." The MRT applies to condos, townhouses, and single-family homes. It does not apply to co-ops.

Mortgage Recording Tax Rates: NYC

New York City uses a tiered rate structure:

The gross tax rates are 1.80% (under $500,000) and 1.925% ($500,000 and above). By state law, the lender must contribute 0.25% of the gross tax, reducing the buyer's out-of-pocket obligation to 1.55% or 1.675% respectively.

There is a $30 standard deduction for one-to-two family dwellings (including co-ops, though co-ops don't owe MRT anyway).

Note the cliff effect: crossing the $500,000 loan threshold increases the entire loan's tax rate, not just the portion over $500,000. A $499,000 loan is taxed at 1.55%. A $501,000 loan is taxed at 1.675% on the entire $501,000.

How Much Will You Owe: NYC MRT Calculator

Example 1: $600,000 NYC condo, 10% down, $540,000 loan

• Rate: 1.675% (loan exceeds $500,000)
• MRT owed: $540,000 × 1.675% = $9,045

Example 2: $450,000 NYC condo, 10% down, $405,000 loan

• Rate: 1.55% (loan under $500,000)
• MRT owed: $405,000 × 1.55% = $6,277.50

Example 3: $1.3 million NYC condo, 20% down, $1,040,000 loan

• Rate: 1.675%
• MRT owed: $1,040,000 × 1.675% = $17,420

These are real cash payments required at closing. They don't go toward your down payment or the purchase price — they're pure tax.

Mortgage Recording Tax Rates: Upstate and Long Island

Outside New York City, rates are lower but still significant:

For a $270,000 upstate mortgage, you might owe approximately $2,700 in MRT (at a 1.00% combined rate). Significantly less than NYC, but still a material cost that first-time buyers sometimes miss in their budgets.

The Co-op Exemption: Why Co-op Buyers Pay $0

This is the most significant structural advantage of buying a co-op over a condo in New York City.

Co-op buyers are not purchasing real property. They're purchasing shares in a private corporation. The financing instrument is a share loan — secured by the shares and the proprietary lease, not by a recorded mortgage against real estate.

Because no mortgage is recorded with the county clerk, there is no Mortgage Recording Tax. A buyer financing a $1 million co-op purchase pays $0 in MRT. The same buyer purchasing a $1 million condo with an $800,000 loan would pay approximately $13,400 in MRT.

This exemption is one of the primary financial reasons co-op prices are often lower than comparable condos. The total transaction cost — including the MRT exemption — narrows or eliminates the apparent price advantage of condos.

The New York Independent Budget Office estimated in 2015 that closing the co-op MRT exemption would generate approximately $150 million annually for the city. The exemption remains in place.

The CEMA: Reducing the MRT on Condo and House Purchases

For buyers purchasing real property (condos, townhouses, single-family homes) who want to reduce their MRT liability, there is a legal strategy called a Consolidation, Extension, and Modification Agreement (CEMA).

A CEMA allows the buyer to assume the seller's existing mortgage and consolidate it with the new loan funds needed. The MRT is then only charged on the "new money" gap — the difference between the seller's outstanding mortgage balance and the buyer's total loan amount.

Example: You're buying a $1 million condo requiring an $800,000 loan. The seller has an outstanding mortgage of $500,000. With a CEMA, you pay MRT only on the $300,000 gap ($300,000 × 1.675% = $5,025) instead of the full $800,000 loan ($800,000 × 1.675% = $13,400). Savings: approximately $8,375 before costs.

CEMAs require cooperation from the seller and both lenders, add CEMA legal fees of $1,000 to $2,000, and often delay closing. It's also standard practice for sellers to split the total MRT savings 50/50, since they also receive a small transfer tax benefit. Net savings after the split and fees are real but require careful calculation.

Don't Overlook MRT in Your Budget

The MRT is reliably absent from generic mortgage calculators and national home-buying guides. It appears on your Loan Estimate from your lender, but first-time buyers don't always read that document carefully before being surprised at closing.

When calculating your total cash-to-close in New York, run the MRT calculation explicitly: multiply your loan amount by the applicable rate for your county, then add it alongside your down payment, attorney fees, title insurance, and any required escrow deposits. In NYC, for most financed condo purchases, MRT alone runs $8,000 to $20,000.

The MRT is one of several New York-specific taxes that dramatically affect your closing cost budget. The New York First-Time Home Buyer Guide includes complete closing cost models for both upstate single-family transactions and NYC condo purchases, along with a CEMA decision framework.

See more New York guides →