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What Costs Do Sellers Pay When Selling a Property in New York City?
Selling a property in New York City involves multiple categories of seller-side costs, including brokerage commissions, taxes, legal fees, and property-type-specific expenses. Understanding these costs in advance allows sellers to better estimate net proceeds and make informed pricing and negotiation decisions.
When selling real estate in New York City, sellers typically incur the following major costs. Actual amounts vary depending on property type (Condo / Co-op / House), sale price, and location.
1
Brokerage Commission
This is usually the largest selling expense.
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Typically 5%–6% of the sale price
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Shared between the listing agent and the buyer’s agent
Example:
For a property sold at $2,000,000, the brokerage commission is usually $100,000–$120,000.
2
Attorney Fees
New York requires attorneys to represent both buyers and sellers in real estate transactions.
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Typical seller attorney fees range from $1,500 to $3,000
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Fees may vary depending on transaction complexity
Sellers should confirm pricing directly with their attorney.
3
Capital Gains Taxes
Capital gains taxes may include three layers:
Federal Capital Gains Tax
Long-term capital gains (property held over 1 year) are taxed based on income brackets:
Income Level Long-Term Capital Gains Rate
$0 – $47,025 0%
$47,026 – $518,900 15%
Over $518,900 20%
High-income sellers may also owe an additional 3.8% Net Investment Income Tax (NIIT).
New York State Tax
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No separate capital gains tax
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Capital gains are treated as ordinary income
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Approximate rate: 6.85% – 10.9%
New York City Tax
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Also treated as ordinary income
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Approximate rate: 3.078% – 3.876%
Primary Residence Exclusion
If the seller lived in the property for at least 2 of the past 5 years:
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$250,000 capital gains exclusion (single filer)
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$500,000 exclusion (married filing jointly)
4
Depreciation Recapture Tax
If the property was previously used as a rental or investment property and depreciation was claimed (or deemed claimed):
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Depreciation must be recaptured upon sale
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Maximum federal depreciation recapture rate: 25%
This applies even if depreciation was not actually deducted on prior tax returns.
5
Transfer Taxes
New York transfer taxes consist of state and city components.
New York State Transfer Tax
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0.4% of the sale price
New York City Transfer Tax
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Sale price ≤ $500,000 → 1%
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Sale price > $500,000 → 1.425%
6
FIRPTA Withholding (Foreign Sellers Only)
If the seller is a foreign person, the transaction may be subject to FIRPTA withholding:
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Typically 15% of the gross sale price withheld at closing
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In certain cases, a reduced rate or exemption may apply
This withholding is a prepayment of tax, not the final tax liability.
7
Outstanding Mortgage & Prorations (Case-Specific)
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Any remaining mortgage balance must be paid off at closing
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Property taxes, HOA fees, or maintenance charges are prorated as of the closing date
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These settlement adjustments typically total several thousand dollars, depending on timing and building costs
8
Additional Costs for Co-op Sellers
If the property is a Co-op, sellers may incur additional fees:
1. Flip Tax
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Not a government tax
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Imposed by the Co-op building
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Used to support building reserves or operations
Common calculation methods include:
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A percentage of the sale price (e.g., 1%–3%)
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Per-share charges
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Flat fees or duration-based formulas
Flip tax policies vary by building and are determined by the board.
2. Stock Transfer Tax
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Co-op sales involve transferring shares rather than real property
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Nominal tax of $0.05 per share
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In many cases refundable by New York State
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Actual treatment depends on building and closing structure
3. Co-op Attorney & Management Fees
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Co-op attorney fee: The building’s attorney reviews the transaction; cost is typically paid by the seller
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Management company fees: Charged for preparing documents, reviewing building records, and coordinating board approval
How Acre Helps Sellers Navigate Selling Costs
Selling property in New York involves a complex cost and tax structure. Acre’s agents assist sellers early in the process by:
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Identifying all potential seller-side costs upfront
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Advising on pricing and negotiation strategy based on net proceeds
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Coordinating with buyers, attorneys, and accountants during the transaction
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Ensuring all fees, prorations, and disclosures are clearly documented
By reducing uncertainty and information gaps, Acre helps sellers move through the transaction efficiently while maximizing clarity and deal certainty.
