Every Long Island real estate closing involves multiple transfer taxes — often confused, frequently miscounted, and sometimes negotiable. Here's the full breakdown of what New York and its local governments charge on Nassau and Suffolk County transactions, who traditionally pays, and where the negotiation opportunities live.

The Four Transfer Taxes on a Long Island Closing

At most Long Island closings, you'll encounter these four transfer-related taxes:

1. NY State Real Estate Transfer Tax — 0.4% of purchase price, seller-paid
2. NY Mansion Tax — 1% to 3.9% on residential sales of $1M+, buyer-paid
3. Peconic Bay Community Preservation Fund (CPF) — 2% on East End Suffolk sales above a town threshold, buyer-paid
4. NY Mortgage Recording Tax — approximately 1.05% to 1.30% of the loan amount, borrower-paid

Let's walk through each.

1. NY State Real Estate Transfer Tax (0.4%)

New York imposes a base transfer tax of $2 per $500 of purchase price — or 0.4%. Applies to virtually all real estate transfers in the state.

Who pays: Traditionally the seller. Not legally required to be the seller — this is contract-negotiable — but in nearly all Long Island transactions, the seller pays.

Examples:

• $500,000 sale = $2,000 state transfer tax
• $1,000,000 sale = $4,000
• $3,000,000 sale = $12,000

2. NY Mansion Tax (1% – 3.9%)

Applies to residential purchases of $1 million or more. Progressive tiers layered onto the base 1% starting in 2019.

Who pays: The buyer. Legally the buyer's obligation, though economic terms can be negotiated in the contract.

Tiers (as of 2026):

• $1M – $1.99M: 1.00%
• $2M – $2.99M: 1.25%
• $3M – $4.99M: 1.50%
• $5M – $9.99M: 2.25%
• $10M – $14.99M: 3.25%
• $15M – $19.99M: 3.50%
• $20M – $24.99M: 3.75%
• $25M+: 3.90%

Important: the rate applies to the entire purchase price once a tier is triggered, not just the amount above the threshold. A $1 change can mean thousands of dollars in tax difference. See our full mansion tax guide for Long Island buyers.

3. Peconic Bay Community Preservation Fund (CPF) Tax (2%)

Applies only to residential purchases in the five East End Suffolk townships: Riverhead, Southampton, East Hampton, Shelter Island, and Southold. Funds preservation of open space, farmland, and historic properties on the East End.

Who pays: The buyer.

Rate: 2% of the purchase price above a town-specific exemption threshold. Thresholds vary but typically fall between $200,000 and $400,000.

Example: On a $2,000,000 Southampton home purchase with a $400,000 exemption, CPF tax = 2% × $1,600,000 = $32,000.

The CPF is a meaningful cost on East End purchases and needs to be factored into the buyer's closing cost budget. For high-priced Hamptons transactions, it can easily exceed the mansion tax.

4. NY Mortgage Recording Tax (~1.05% – 1.30%)

Applies to the mortgage amount, not the purchase price. Paid at recording. Rate varies by county and loan amount.

Who pays: The borrower (buyer). Structurally, the lender pays a portion (0.25%), but the borrower's rate is what most people focus on.

Long Island rates (borrower's share):

• Loans under $500,000: approximately 1.05%
• Loans of $500,000+: approximately 1.30%

On a $500,000 Long Island mortgage, expect ~$5,250 in mortgage recording tax. On a $1M mortgage, ~$13,000.

The CEMA Escape Hatch: If you're refinancing or the seller has an existing mortgage that can be assigned, a CEMA agreement can eliminate mortgage recording tax on the assigned portion — often saving thousands.

Who Pays What: The Long Island Summary Table

Standard convention on Long Island residential closings:

• State Transfer Tax (0.4%): Seller
• Mansion Tax (1%–3.9%): Buyer
• Peconic Bay CPF (2%, East End only): Buyer
• Mortgage Recording Tax (~1.05%–1.30%): Borrower (Buyer)

These are conventions, not laws. In some transactions — particularly in soft markets or with motivated sellers — the buyer can negotiate seller concessions or credits toward these taxes. Your closing attorney should raise this during contract negotiation.

Common Mistakes and Miscounts

Assuming "transfer tax" is one thing. Buyers often budget for "the transfer tax" without realizing there are potentially four separate taxes on their transaction. Underestimating total closing costs.

Missing the mansion tax cliff. Pricing at $1,050,000 vs $999,999 can trigger $10,500 in mansion tax. If you're negotiating in that range, know the math.

Forgetting Peconic CPF on East End buys. On a $3M Sag Harbor purchase, CPF alone can be $52,000. Not a small number to discover at the closing table.

Not exploring CEMA. Refinancing or buying from a seller with an existing mortgage? CEMA can eliminate a huge chunk of mortgage recording tax. Ask early.

Total Transfer Tax Bite on Sample Long Island Closings

Rough estimates of all transfer-related taxes combined:

• $500K Suffolk home, 20% down: ~$2,000 state tax + ~$4,200 mortgage recording tax = ~$6,200 total
• $1M Nassau home, 20% down: ~$4,000 state tax + $10,000 mansion tax + ~$10,400 mortgage recording tax = ~$24,400 total
• $3M Southampton estate, 30% down: ~$12,000 state tax + $45,000 mansion tax + $52,000 CPF + ~$27,300 mortgage recording tax = ~$136,300 total

Numbers get big quickly at higher price points. Plan accordingly. Our Long Island closing cost calculator runs these numbers for your specific transaction.

Bottom Line

Understanding Long Island's transfer taxes helps you budget accurately, negotiate where possible, and avoid surprises at the closing table. A good closing attorney flags all four taxes early — during attorney review — and structures the deal to minimize what's negotiable.

Buying or selling on Long Island? Our attorneys break down every closing cost in advance so there are no surprises. Contact Kambo Law, PLLC for a free 20-minute consultation.