Are you budgeting for a home closing in Pound Ridge and hearing about transfer taxes for the first time? You are not alone. These state-level taxes can change your total cash to close, especially near the seven-figure price points common in northern Westchester. In this guide, you will learn what New York’s transfer tax and mansion tax are, how they are calculated, who typically pays, and the practical steps to take for a smooth Pound Ridge closing. Let’s dive in.
New York transfer tax explained
New York State imposes a real estate transfer tax on most recorded property sales. The rate is $2 for each $500 of consideration, which equals 0.4% of the purchase price. You report and pay this tax at recording using Form TP‑584, the state’s combined transfer tax return.
The tax is addressed when the deed is submitted for recording. The contract of sale and local practice often determine who provides the funds at closing. In many residential deals, sellers fund the state transfer tax, but that is not universal. Always confirm what your contract says and ask your closing attorney to spell it out early.
For official definitions and filing instructions, review the New York State Department of Taxation and Finance website. You can start at the main site and search for TP‑584 and real estate transfer tax guidance on the New York State Department of Taxation and Finance website.
What the mansion tax covers
New York also imposes a one-time mansion tax on residential transfers when the purchase price is $1,000,000 or more. The rate is 1.0% of the total purchase price once the threshold is met. This is a flat rate that applies to the full price if the price is at or above $1,000,000.
The mansion tax applies to residential real property and residential cooperative apartments when the price meets the threshold. It is reported and paid at recording on Form TP‑584, so it shows up alongside the standard transfer tax on your closing statement.
In day-to-day practice, buyers frequently fund the mansion tax on purchases of $1,000,000 or more. That said, the contract controls. Confirm the allocation with your attorney and lender well before closing so your cashier’s checks or wire instructions match the final plan.
How this applies in Pound Ridge
If you are closing in Pound Ridge, your deed is recorded with the Westchester County Clerk. You, your attorney, or your title company will file Form TP‑584 at the time of recording along with the deed.
In addition to state-level transfer taxes, counties and municipalities may impose their own transfer or recording taxes and fees. These vary by location. For Pound Ridge, the action step is simple. Ask the Westchester County Clerk or Department of Finance which local charges apply and how much they are for your transaction. You can find county office information on the Westchester County official site.
If you will have a mortgage, remember that mortgage recording tax is separate from transfer and mansion taxes. Mortgage recording tax rates and calculations depend on county and loan amount. Ask your lender and settlement attorney for an estimate of the mortgage recording tax and all recording fees for Westchester County.
Who pays at closing
Statutes create the tax liabilities, but the contract of sale usually dictates who funds each item at closing. Common patterns in New York residential deals include the following:
- State transfer tax at 0.4% is often treated as a seller cost, but it is negotiable.
- The 1% mansion tax on purchases of $1,000,000 or more is frequently funded by the buyer at closing.
- The settlement attorney and title company collect the funds from the responsible party and remit them with the deed and TP‑584 at recording.
Always check your contract. If your financing requires that certain taxes must come from the buyer’s funds, your lender will explain that during underwriting.
Budgeting examples for Pound Ridge buyers and sellers
These illustrations use state-level amounts only. Your final number will also include any county transfer taxes, local recording fees, title charges, and mortgage recording tax if you have a loan.
Purchase price $900,000
- State transfer tax at 0.4%: $3,600
- Mansion tax: $0
- Add county and recording charges as applicable
Purchase price $1,000,000
- State transfer tax at 0.4%: $4,000
- Mansion tax at 1%: $10,000
- Combined state-level taxes: $14,000, plus county and recording charges
Purchase price $1,500,000
- State transfer tax at 0.4%: $6,000
- Mansion tax at 1%: $15,000
- Combined state-level taxes: $21,000, plus county and recording charges
Use these as a starting point. Your closing attorney and title company will produce an itemized, transaction-specific estimate once you are in contract.
Filing, forms, and timing
The Combined Real Estate Transfer Tax Return, also known as Form TP‑584, is the required state form used to report and pay the state transfer tax and the mansion tax. Most local transfer taxes, if any, are also reported through TP‑584 or a county addendum. You can review the form and instructions by searching for TP‑584 on the New York State Department of Taxation and Finance website.
Here is how it fits into your closing timeline:
- Your attorney and title company prepare TP‑584 together with the deed and transfer documents.
- Any required county forms or addenda are added based on Westchester County’s procedures.
- The taxes are paid and the forms submitted when the deed is recorded. A deed generally cannot be recorded without the required return and payment or a valid exemption.
Confirm with your attorney how funds will be brought to closing, and with the county clerk which payment methods are accepted for recording.
Special situations to know
Some transactions qualify for exemptions under state law. Examples include certain transfers to governmental entities, transfers incident to death, and some non-profit transfers. The TP‑584 instructions detail exemptions and the documentation that must be provided.
If your purchase involves mixed use, such as residential with a commercial element, the mansion tax analysis can be more nuanced. Your attorney will review how the property is characterized and whether any allocation is needed. For cooperative apartments, the mansion tax generally applies when the price is $1,000,000 or more, because co-op transfers are treated as residential transfers for this purpose.
For portfolio or multi-parcel purchases, how the price is allocated among residential and non-residential components can affect mansion tax exposure. Keep your legal and tax advisors involved early so the contract and TP‑584 reporting align.
Local checklist for a smooth Pound Ridge closing
Use this quick list to keep your transfer tax tasks on track:
- Confirm who pays each tax. Have your attorney specify in the contract whether the seller will fund the 0.4% state transfer tax and whether the buyer will fund the 1% mansion tax on purchases of $1,000,000 or more.
- Ask your lender for an estimate of mortgage recording tax and lender-required prepaid items if you are financing.
- Have your attorney or title company contact the Westchester County Clerk to confirm any county transfer taxes, recording fees, county addenda, and accepted payment methods. You can find contacts via the Westchester County official site.
- Review a preliminary closing statement at least several days before closing so you can arrange wires or cashier’s checks in the correct amounts.
- Keep TP‑584 on your radar. It is the central form for reporting and paying the state transfer and mansion taxes.
Next steps for buyers and sellers
A little planning goes a long way. If you are preparing to buy or sell in Pound Ridge, budget for the state transfer tax at 0.4% of price and, if applicable, the 1% mansion tax on the full purchase price for homes at or above $1,000,000. Then, add county and recording charges and any mortgage recording tax if you will have a loan. Your closing team will give you an exact figure once you are in contract.
If you want help building a clear, line-by-line estimate for your situation, reach out. Schedule your Westchester consultation with Unknown Company and get step-by-step guidance tailored to your Pound Ridge closing.
FAQs
What is New York’s transfer tax for Pound Ridge closings?
- New York charges a real estate transfer tax at $2 per $500 of consideration, which equals 0.4% of the purchase price, reported and paid on Form TP‑584 at recording.
Does New York’s 1% mansion tax apply to co-ops?
- Yes. Transfers of residential cooperative apartments are generally treated as residential transfers. If the price is $1,000,000 or more, the 1% mansion tax applies.
Who typically pays the mansion tax in Westchester County?
- Practice varies by contract, but buyers frequently fund the mansion tax at closing on purchases of $1,000,000 or more. Confirm the allocation in your contract and with your attorney and lender.
When are the transfer tax and mansion tax due in Pound Ridge?
- They are due at recording. Your settlement attorney and title company file Form TP‑584 and remit the taxes when the deed is submitted to the Westchester County Clerk.
How do I estimate mortgage recording tax for a Pound Ridge purchase?
- Mortgage recording tax is separate from transfer and mansion taxes and depends on county and loan amount. Ask your lender and closing attorney for a Westchester-specific estimate.
