Pricing Near the Mansion Tax Threshold: Why $995K Sells Faster Than $1.02M

NYC’s mansion tax creates price ceilings at $1M, $2M, $3M and $5M. Here’s how sellers should price around them.

Oct 06, 2026

Pricing Near the Mansion Tax Threshold: Why $995K Sells Faster Than $1.02M

Contents

Why the walls exist The pricing rule Where the $3M line is different When crossing the line is right Practical execution For your listing agent

Scroll any NYC search results page and you'll see the pattern: a cluster of listings at $995,000, then nothing until $1,050,000. A wall at $1,995,000. Another at $2,995,000. These aren't coincidences — they're the mansion tax carving the market into zones.

Why the walls exist

The NYC mansion tax applies to the entire purchase price at whatever bracket the price falls into, not marginally. So crossing a threshold costs the buyer a lump sum, instantly:

$999,999 → $1,000,000: buyer's tax goes from $0 to $10,000
$1,999,999 → $2,000,000: $19,999 → $25,000 (+$5,000 for one dollar)
$2,999,999 → $3,000,000: $37,499 → $45,000 (+$7,500) — and the seller's NYS transfer tax simultaneously jumps from 0.4% to 0.65%
$4,999,999 → $5,000,000: $74,999 → $112,500 (+$37,500)

Buyers price this into what they'll offer. A buyer weighing your $1,020,000 apartment mentally compares it to a $995,000 apartment that costs them $10,200 less in tax — a $35,000 effective gap on a $25,000 price difference.

The pricing rule

If your realistic value sits within roughly 2%–3% above a threshold, price below the threshold.

At $1,020,000, you're fishing in a shallow pool: buyers searching under $1M never see you, and buyers above $1M compare you unfavorably to better apartments at $1.1M. At $995,000, you appear in every "under $1M" search filter, you attract the enormous first-time and step-up buyer segment, and competitive bidding can carry you past $1,020,000 anyway — buyers who fall in love will cross the line voluntarily.

That last point is the key insight: pricing under a threshold doesn't cap your outcome. It maximizes your buyer pool, and buyers can always bid up. Pricing above a threshold caps your pool from the start.

Where the $3M line is different

At $3,000,000, two things happen at once: the buyer's mansion tax rises to 1.5%, and the seller's NYS transfer tax rises from 0.4% to 0.65%. A $3,000,000 sale costs the seller $7,500 more in state transfer tax than a $2,999,000 sale — you lose more than the $1,000 price difference. This threshold cuts both ways, and it's the one sellers most often overlook.

When crossing the line is right

Your value is clearly well above the threshold. If comps support $2,250,000, price there. Pricing at $1,995,000 to chase the bracket just gives money away — you'll get bids at $2.1M, not $2.3M, because the listing price anchors expectations.
Genuinely scarce product. A rare layout, a penthouse, a townhouse with no comparable alternatives — buyers with no substitute absorb the tax.
Cash buyers and top-of-market segments are less tax-sensitive relative to price.

Practical execution

Get honest comps first. Threshold strategy is a refinement of correct pricing, not a substitute. Price the apartment right, then check where it sits relative to the nearest line.
Use the psychological numbers: $995,000, $1,195,000, $1,995,000, $2,995,000, $4,995,000.
Handle near-line negotiations explicitly. If you're listed at $1,050,000 and a buyer offers $999,000, quantify the gap out loud: their all-in difference is ~$61,000, not $51,000. Meeting at $1,010,000 helps neither party; meeting at $999,000 with a firm, fast close might net you more than months of sitting.
Run your own net sheet at both prices. Sometimes $995,000 net beats $1,030,000 net after two extra months of carrying costs, a price cut, and a stale-listing discount.

For your listing agent

Ask them to show you: days on market for comparable listings priced just above versus just below the nearest threshold. The data usually makes the argument better than theory does.

This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Tax figures reflect New York law as of August 2026. Consult your attorney and CPA. Sources: NYS Tax Law §1402-a (mansion tax); §1402 (RETT).

Want to stay up to date on NYC real estate?
Follow @tonyinjeyeo on Instagram for more market insights, tips, and updates.
Buying, selling, renting, or exploring NYC real estate?
Yeo Real Estate assists with all aspects of NYC real estate, from residential and commercial transactions to market guidance and property searches.
Schedule a consultation:
📧 hello@yeonyc.com
📞 +1 646-940-0166
Yeo Real Estate
135 W 50th St, Suite 200
New York, NY 10020

REBNY Member

Contents

Why the walls exist The pricing rule Where the $3M line is different When crossing the line is right Practical execution For your listing agent

Market Renter Seller Buyer

Pricing Near the Mansion Tax Threshold: Why $995K Sells Faster Than $1.02M

NYC’s mansion tax creates price ceilings at $1M, $2M, $3M and $5M. Here’s how sellers should price around them.

Tony InJe Yeo

Oct 06, 2026

Contents

Why the walls exist The pricing rule Where the $3M line is different When crossing the line is right Practical execution For your listing agent

Why the walls exist

The NYC mansion tax applies to the entire purchase price at whatever bracket the price falls into, not marginally. So crossing a threshold costs the buyer a lump sum, instantly:

$999,999 → $1,000,000: buyer's tax goes from $0 to $10,000
$1,999,999 → $2,000,000: $19,999 → $25,000 (+$5,000 for one dollar)
$2,999,999 → $3,000,000: $37,499 → $45,000 (+$7,500) — and the seller's NYS transfer tax simultaneously jumps from 0.4% to 0.65%
$4,999,999 → $5,000,000: $74,999 → $112,500 (+$37,500)

The pricing rule

If your realistic value sits within roughly 2%–3% above a threshold, price below the threshold.

Where the $3M line is different

When crossing the line is right

Your value is clearly well above the threshold. If comps support $2,250,000, price there. Pricing at $1,995,000 to chase the bracket just gives money away — you'll get bids at $2.1M, not $2.3M, because the listing price anchors expectations.
Genuinely scarce product. A rare layout, a penthouse, a townhouse with no comparable alternatives — buyers with no substitute absorb the tax.
Cash buyers and top-of-market segments are less tax-sensitive relative to price.

Practical execution

Get honest comps first. Threshold strategy is a refinement of correct pricing, not a substitute. Price the apartment right, then check where it sits relative to the nearest line.
Use the psychological numbers: $995,000, $1,195,000, $1,995,000, $2,995,000, $4,995,000.
Handle near-line negotiations explicitly. If you're listed at $1,050,000 and a buyer offers $999,000, quantify the gap out loud: their all-in difference is ~$61,000, not $51,000. Meeting at $1,010,000 helps neither party; meeting at $999,000 with a firm, fast close might net you more than months of sitting.
Run your own net sheet at both prices. Sometimes $995,000 net beats $1,030,000 net after two extra months of carrying costs, a price cut, and a stale-listing discount.

For your listing agent

Ask them to show you: days on market for comparable listings priced just above versus just below the nearest threshold. The data usually makes the argument better than theory does.

Want to stay up to date on NYC real estate?
Follow @tonyinjeyeo on Instagram for more market insights, tips, and updates.
Buying, selling, renting, or exploring NYC real estate?
Yeo Real Estate assists with all aspects of NYC real estate, from residential and commercial transactions to market guidance and property searches.
Schedule a consultation:
📧 hello@yeonyc.com
📞 +1 646-940-0166
Yeo Real Estate
135 W 50th St, Suite 200
New York, NY 10020

REBNY Member

Contents

Why the walls exist The pricing rule Where the $3M line is different When crossing the line is right Practical execution For your listing agent