Closing Costs for a New Development Condo in NYC: A Line-by-Line Breakdown
Buying from a developer costs more at closing than a resale, mostly because the offering plan usually shifts the seller's transfer taxes onto you. Here's every line you're likely to see, which ones the plan sets, and a worked example for a $2 million apartment.
On a resale condo in NYC, the seller pays the transfer taxes. On a new development, the developer (called the sponsor) is the seller, and its offering plan almost always says you pay them. Add the costs the plan itself creates, like the working capital contribution and a share of the super's apartment, and closing on a new condo usually costs noticeably more than closing on a resale at the same price.
Here's every line to expect, where it comes from, and how to check it in the plan.
The Short Version
- Taxes are the biggest piece: the mansion tax (from $1 million), the NYC and New York State transfer taxes (which the sponsor usually passes to you) and, if you finance, the mortgage recording tax.
- The offering plan adds its own charges: a working capital contribution, often a share of the resident manager's unit, sometimes a sponsor fee, and the sponsor's attorney's fee.
- Then the usual costs of any purchase: your attorney, title insurance, bank fees and adjustments for common charges and taxes.
- Most of these scale with the price, so run the numbers for your own apartment. The plan's "Closing Costs and Adjustments" section lists what the sponsor charges.
Taxes
NYC and New York State transfer taxes (usually yours in a new development)
The city's Real Property Transfer Tax (RPTT) is 1% of the price up to $500,000 and 1.425% above that. The state transfer tax is 0.4%, rising to 0.65% on NYC homes of $3 million or more. By law these are the seller's taxes, but sponsor plans routinely make the buyer pay them as a condition of the sale.
Good to know: when you pay the seller's tax, the tax you pay counts as part of the price, so the bill is "grossed up" and comes out slightly higher than the rate times the price. Your attorney or title company will calculate the exact figure.
The mansion tax
Buyers of homes priced at $1 million or more pay New York State's mansion tax, on every resale and new purchase alike. In NYC it rises with the price:
| Price | Mansion tax |
|---|---|
| $1 million to under $2 million | 1% |
| $2 million to under $3 million | 1.25% |
| $3 million to under $5 million | 1.5% |
| $5 million to under $10 million | 2.25% |
| $10 million to under $15 million | 3.25% |
| $15 million to under $20 million | 3.5% |
| $20 million to under $25 million | 3.75% |
| $25 million or more | 3.9% |
The rate applies to the whole price, not just the part above each threshold, so a home at $1,999,000 and one at $2,000,000 pay different rates.
Mortgage recording tax (if you finance)
Condo buyers with a mortgage pay a tax on the loan amount: 1.8% on loans under $500,000 and 1.925% on loans of $500,000 or more. (Co-op loans don't pay it, which is one reason condo closings cost more.) Paying cash, or borrowing less, lowers it.
Charges the Offering Plan Sets
These are the lines that differ from building to building, and they're all in the offering plan.
- Working capital contribution. A one-time payment to the condo, not the developer, to give the new board a cash cushion. Two months of common charges is the norm: about 73% of the plans we read ask for two months. It isn't refundable. See the working capital contribution.
- The resident manager's unit. In many new buildings, buyers fund the purchase of the super's apartment at closing, split by common interest. See the super's apartment (RMU).
- A sponsor fee for creating the condominium. Some plans, mostly in Brooklyn, charge a flat fee to cover the sponsor's costs of setting up the condo. See the sponsor's condo-creation fee.
- The sponsor's attorney's fee. Many plans make the buyer pay a fee to the sponsor's lawyers for preparing the closing documents. The plan states the amount.
- Recording and filing fees for the deed and other closing documents, which plans often assign to the buyer.
- Interest or late charges if you're not ready to close on the date the sponsor sets. Read the closing date and default terms in your purchase agreement.
Tip: amendments can change these. A later amendment may raise the sponsor's attorney's fee or change who pays the transfer taxes on unsold units. See how to find offering plan amendments.
Costs of Any Purchase
- Your own attorney. In NYC, buyers almost always hire a real estate lawyer, usually for a flat fee.
- Title insurance. An owner's policy protects you, and a lender's policy is required if you finance. Premiums in New York follow a state-regulated rate schedule and rise with the price and loan amount. In some new developments the sponsor designates the title company.
- Title search and municipal searches, plus any title company fees.
- Bank fees if you finance: application, appraisal, credit report, origination and points, and the bank's own attorney.
- Adjustments. You reimburse the sponsor for any common charges or property taxes it has prepaid for the period after closing.
- Prepaid escrow if your lender collects property taxes and insurance monthly.
- Your own insurance. An HO-6 policy for your apartment. See condo insurance vs. homeowners insurance.
A Worked Example: A $2 Million Apartment
Here are the tax lines for a $2,000,000 new condo bought with a $1,600,000 mortgage, before the gross-up and before the plan's own charges and the usual fees:
| Line | Rate | Amount |
|---|---|---|
| Mansion tax | 1.25% of the price | $25,000 |
| NYC transfer tax (paid for the sponsor) | 1.425% of the price | $28,500 |
| NYS transfer tax (paid for the sponsor) | 0.4% of the price | $8,000 |
| Mortgage recording tax | 1.925% of the loan | $30,800 |
| Taxes alone | $92,300 |
On a resale at the same price, the seller would usually pay the two transfer taxes, so the buyer's tax bill would be $55,800. The $36,500 difference, plus the working capital and other plan charges, is why new development closings cost more. Buy the same apartment for cash and the mortgage tax disappears.
Can You Negotiate New Development Closing Costs?
Sometimes. In a building that's selling slowly, sponsors may agree to pay part or all of the transfer taxes, cover the sponsor's attorney's fee, or give a credit at closing. You're more likely to get a concession on the last unsold apartments, or when the building has been selling for a long time. Check how many homes have actually closed: closings are public, and the sales progress page tracks them for buildings with a Schedule A.
Tip: ask for any concession in writing, in the purchase agreement or a rider. Sponsors usually treat transfer taxes they pay as a price reduction, and your attorney can tell you how that affects the gross-up and the mansion tax.
Where to Find Each Cost in the Offering Plan
- "Closing Costs and Adjustments" (sometimes "Closing Costs Paid by Purchaser"): transfer taxes, attorney's fees, recording fees and adjustments.
- The working capital fund section, often near the budget discussion.
- The resident manager's unit section, if the building has one.
- The purchase agreement, usually an exhibit in Part II, for deposits, closing dates and late-closing charges.
- Schedule A, for each apartment's price and common charges, which set the working capital amount. See Schedule A and Schedule B.
Look up any building's plan on The Condo Book Project, or search "closing costs and adjustments" to read the section in several plans.
Common Questions
Who pays transfer taxes on a new condo in NYC?
Usually the buyer. By law the NYC and New York State transfer taxes are the seller's, but sponsor offering plans typically make the buyer pay them as part of the deal.
How much are closing costs on a new development condo in NYC?
It depends on the price and the loan. On a $2 million apartment with a $1.6 million mortgage, the taxes alone come to about $92,300 before the gross-up. Add the working capital contribution, any super's-unit share, the sponsor's attorney's fee, your own attorney, title insurance and bank fees.
What is the mansion tax in NYC?
A New York State tax paid by buyers of homes priced at $1 million or more. In NYC it ranges from 1% of the price under $2 million to 3.9% at $25 million or more.
Do condo buyers pay the mortgage recording tax?
Yes, if they take out a mortgage: 1.8% of loans under $500,000 and 1.925% of loans of $500,000 or more. Co-op buyers don't pay it.
Can I get the sponsor to pay closing costs?
Sometimes, especially in buildings that have been on the market a while. Ask for the concession in writing and have your attorney check how it affects the taxes.
Where this comes from: the closing cost, working capital and purchase agreement sections of NYC condo offering plans, and the NYC Department of Finance and New York State tax rates for transfer, mansion and mortgage recording taxes. Rates can change; confirm them with your attorney before you sign. This is general information, not legal or tax advice. Updated October 2026.