Who Actually Pays What at Closing on Long Island, With the Real Numbers
*Closing day on Long Island comes with more than one tax bill, and buyers and sellers do not split them the way most people assume.*
If you are budgeting for a sale or a purchase here, the confusion usually starts with the word tax. There is not one transfer tax in New York. There are several, and they land on different sides of the table depending on where you are buying and what the price is.
The State Transfer Tax and Who Writes the Check
New York State charges a real estate transfer tax on every conveyance where the price is over five hundred dollars, computed at two dollars for each five hundred dollars of the sale price, which works out to about 0.4 percent. That tax is paid by the seller. The state's own guidance is clear on this: the base tax is paid by the grantor, meaning the seller, and only shifts to the buyer if the seller does not pay it or is exempt.
On top of that base tax, New York adds what everyone calls the mansion tax once a home sells for one million dollars or more. This one flips the direction of payment. The additional one percent tax applies to residences where the price hits that one million dollar mark, and it is required to be paid by the buyer, not the seller. With median prices in parts of Nassau's North Shore and plenty of other Long Island towns crossing seven figures, this is not a rare luxury tax anymore. It applies the moment the whole price crosses that line, so a sale at exactly one million dollars owes the tax on the full amount, not just the dollar over the threshold.
There is a backstop built into the law too. If a buyer somehow fails to pay the mansion tax, the seller becomes responsible for it, and the debt turns into a joint and several liability shared by both parties. Attorneys build this into the contract language so nobody gets surprised at the closing table.
The East End Has Its Own Extra Layer
If you are buying anywhere in East Hampton, Riverhead, Shelter Island, Southampton, or Southold, add another tax that does not exist anywhere else on Long Island. It is called the Peconic Bay Region Community Preservation Fund tax, and it funds land and water protection work across those five towns.
Southampton's own government describes it plainly: the CPF tax is a transfer tax of 2.5 percent, which includes a 0.5 percent Community Housing Fund piece, charged on real property in the town. Riverhead did not adopt the housing fund add on, so its rate stayed lower than the other four towns. The housing fund piece is newer than the core preservation tax. The supplemental 0.5 percent housing tax took effect in the spring of 2023 in Southampton, East Hampton, Shelter Island, and Southold, layered on top of the existing 2 percent preservation tax that runs across all five East End towns.
This tax also comes with real exemptions worth checking before you assume the full rate applies. Southampton's guidance notes that the first four hundred thousand dollars of an improved residential parcel is exempt when the price is two million dollars or less, and there is a separate first time homebuyer exemption available. If you are buying your first home out east, it is worth asking your attorney whether you qualify before you assume you owe the full percentage.
What This Means When You Sit Down to Budget
Put it together and the picture looks different depending on price and location. A seller almost anywhere on Long Island covers the roughly 0.4 percent state base tax. A buyer at or above one million dollars covers the mansion tax on top of their other closing costs. And a buyer on the East End owes the Peconic Bay tax as well, on top of everything else, unless an exemption applies.
None of these numbers are negotiable with the government, but the contract can spell out who covers what if a deal calls for something different than the default. That is exactly the kind of detail worth walking through with your attorney before you sign anything, not after.
If you have a specific address or a specific price point you are trying to run the math on, ask me directly at /askmuds. And if you are just curious what your own home might be worth before you think about any of this, check /my-home-value/.