If you're buying a home on Long Island in 2026 at or near $1 million, the New York mansion tax is going to be one of the biggest line items at closing — and one of the most misunderstood. This guide breaks down exactly how it works, who pays, what the current tiers are, and how to plan for it on Nassau and Suffolk County closings.

What is the NY Mansion Tax?

The New York mansion tax is a state-level transfer tax imposed on residential real estate transactions where the purchase price is $1 million or more. It was originally enacted in 1989 at a flat 1% — back when $1 million genuinely was a "mansion" price point in New York. Today, with median Nassau County sale prices well into seven figures in towns like Garden City, Manhasset, and Great Neck, the mansion tax is in play for a huge share of Long Island closings.

In 2019, New York layered a progressive supplemental mansion tax on top of the base 1%, with rates escalating at higher price points — up to a combined 3.9% at the top end. That means a $5 million Long Island purchase carries roughly $137,500 in mansion tax alone.

NY Mansion Tax Rate Tiers (2026)

The combined mansion tax (base 1% + supplemental) applies as follows on residential purchases:

• $1,000,000 – $1,999,999: 1.00% total
• $2,000,000 – $2,999,999: 1.25% total
• $3,000,000 – $4,999,999: 1.50% total
• $5,000,000 – $9,999,999: 2.25% total
• $10,000,000 – $14,999,999: 3.25% total
• $15,000,000 – $19,999,999: 3.50% total
• $20,000,000 – $24,999,999: 3.75% total
• $25,000,000 and above: 3.90% total

Important: unlike a graduated income tax, the mansion tax applies as a single flat rate on the entire purchase price once a tier is hit — not just the amount above the threshold. A $1 closing-price difference can mean thousands more in tax.

Who Pays the Mansion Tax on Long Island?

In New York, the mansion tax is statutorily the buyer's responsibility, paid at closing. It cannot be waived. On a $1.2M Nassau County colonial, that's $12,000 due from the buyer at the closing table — separate from down payment, attorney fees, mortgage recording tax, title insurance, and standard closing costs.

In practice, the question of who economically bears the cost is a contract negotiation. In tighter markets, buyers sometimes negotiate seller concessions or credits to offset the mansion tax. In hot markets, the buyer simply absorbs it. Your Long Island real estate attorney should flag the mansion tax during attorney review and discuss negotiation options before the contract becomes binding.

The "Just Below" Strategy and Why It's Risky

The cliff structure of the mansion tax creates an obvious temptation: price a home at $999,999 instead of $1,000,000 to avoid the entire 1% tax — $9,999 saved on a $1 in price reduction. We see this strategy attempted often, and we sometimes see it work. But it carries real risks:

• Appraisal gap. If the lender's appraisal comes in higher than the negotiated price, the IRS or NY DTF may treat the transaction as a constructive higher-price deal.
• Side payments. Sellers sometimes ask buyers to pay for furniture, art, or other items separately to keep the recorded sale price below $1M. This is aggressive and can constitute tax evasion if the values are not legitimately separable.
• Future audit risk. The NY Department of Taxation and Finance reviews high-value transfers, particularly clustered just below the threshold.

Done properly with arm's-length pricing, the just-below strategy is legitimate. Done aggressively, it's a problem. We help clients understand the line.

Mansion Tax by Long Island Market

Where the mansion tax tends to apply on Long Island today:

• Nassau North Shore: Routinely — Manhasset, Plandome, Great Neck Estates, Kings Point, Old Westbury, Roslyn often see $1.5M–$4M sales.
• Nassau Central: Frequently — Garden City, Stewart Manor, Williston Park.
• Nassau South Shore: Occasionally — Rockville Centre and waterfront Long Beach.
• Suffolk North Shore: Often — Cold Spring Harbor, Lloyd Harbor, Northport waterfront, parts of Fort Salonga and Nissequogue.
• East End: Almost always — the Hamptons, Sag Harbor, and East Hampton routinely transact at $3M+, also triggering Peconic Bay CPF tax.
• Most other Suffolk markets: Less common — Smithtown, Babylon, Brookhaven, Islip rarely cross $1M except for waterfront.

Other Long Island Closing Taxes to Know

The mansion tax is one of several transfer-related taxes Long Island buyers face. Plan for all of them:

• NY State Real Estate Transfer Tax — 0.4% of price, paid by the seller (typical).
• NY Mortgage Recording Tax — ~1.05% under $500K loan, ~1.30% above, paid by the borrower.
• Peconic Bay CPF (East End only) — 2% on amounts above town-specific thresholds, paid by the buyer.

Planning Tips for Long Island Buyers Near the Threshold

Before signing a contract on a Long Island home in the $950K–$1.05M range:

• Have your attorney calculate the exact mansion tax exposure.
• Discuss seller concessions during attorney review — the time to negotiate is before you're bound.
• Consider whether legitimate exclusions (like a separately purchased boat slip or unattached personal property) can reduce the recorded sale price.
• Build the mansion tax into your closing cost reserve — don't be surprised at the closing table.

Bottom Line

The NY mansion tax is one of the largest single line items on a Long Island closing statement once you cross the $1M threshold — and the tiered structure punishes you sharply at each step up. With the right attorney handling the contract and reviewing the math during attorney review, you can plan around it, negotiate where possible, and avoid surprises.

Need a Long Island closing attorney who plans mansion tax exposure into every deal? Contact Kambo Law, PLLC to schedule a consultation. We handle closings across Nassau and Suffolk County from our Jericho office.