The 8 Mansion Tax Brackets Explained: Why $1,999,999 vs. $2,000,000 Matters
Most progressive taxes work marginally: only the dollars above each threshold get taxed at the higher rate. The NYC mansion tax does not work that way. Whatever bracket you land in applies to your entire purchase price. That creates "cliffs" — price points where one extra dollar triggers thousands in additional tax.
The 2026 bracket table (unchanged since 2019)
Purchase Price | Mansion Tax Rate |
|---|---|
$1,000,000 – $1,999,999 | 1.00% |
$2,000,000 – $2,999,999 | 1.25% |
$3,000,000 – $4,999,999 | 1.50% |
$5,000,000 – $9,999,999 | 2.25% |
$10,000,000 – $14,999,999 | 3.25% |
$15,000,000 – $19,999,999 | 3.50% |
$20,000,000 – $24,999,999 | 3.75% |
$25,000,000 + | 3.90% |
(Below $1,000,000: no mansion tax. These tiered rates apply within New York City; elsewhere in NY State the tax is a flat 1% above $1M.)
The cliff effect in real dollars
$999,999 → $1,000,000: tax goes from $0 to $10,000
$1,999,999 → $2,000,000: tax goes from $19,999.99 to $25,000 (a $5,000 jump for one dollar)
$2,999,999 → $3,000,000: $37,499.99 → $45,000
$4,999,999 → $5,000,000: $74,999.99 → $112,500 (a $37,500 jump)
That last one is why you'll see so many Manhattan listings priced at $4,995,000 and so few at $5,050,000.
What this means for buyers
Negotiate with the brackets in mind. If a deal is converging near a threshold, quantify the cliff for the seller. "At $5.05M I pay $113,625 in mansion tax; at $4.995M I pay $74,925. Meeting me below the line saves me $38,700 — let's split the difference" is a legitimate, common negotiation.
Watch total consideration, not just price. If the contract has you paying the seller's transfer taxes (common in new developments), that amount is added to the taxable consideration and can push you over a threshold.
Don't get cute. Artificially splitting a purchase (e.g., a side agreement for "furniture" at an inflated price) to duck under a bracket is tax evasion. The state aggregates related transfers and audits recorded deeds. Every structure should go through your attorney.
What this means for sellers
Pricing just under a cliff widens your buyer pool. A $2,050,000 listing competes with $1,995,000 listings whose buyers pay a lower rate on a lower price. If your target value straddles a bracket line, discuss with your agent whether pricing under the line generates enough extra demand to net you more.
Did the brackets change in 2026?
No. The Legislature's one-house budget proposals in March 2026 would have restructured the tax significantly, but the changes were dropped from the final budget. The 2019 bracket structure above remains current law.
This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Figures reflect New York law as of August 2026. Consult a licensed attorney and CPA regarding your specific transaction. Sources: NY Tax Law § 1402-a/1402-b; NYS Department of Taxation and Finance.
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