When a home changes hands in Suffolk County, New York, there are specific taxes due at closing that both buyers and sellers should understand before they sign a contract. These taxes are part of the cost of transferring legal ownership of the property and they affect your net proceeds or closing funds.
What is a Transfer Tax?
A real estate transfer tax is a fee charged by state or local government when property changes ownership.
In New York, transfer taxes apply to most homes sold, and Suffolk County follows state tax rules as the baseline.
State Transfer Tax in New York
New York State imposes a real estate transfer tax of $2.00 for every $500 of the sale price, which equals a tax rate of 0.4% of the total sale price. This applies to most residential property sales, whether the property is a house, condo, or co-op.
For example:
If the sale price is $600,000, the state transfer tax is:
$600,000 ÷ 500 × $2 = $2,400.
This state tax is often referred to simply as the documentary transfer tax.
Who Pays the State Transfer Tax?
In most Suffolk County transactions, the seller pays the state transfer tax unless the contract explicitly shifts the responsibility. This is the common custom and legal default in New York outside New York City.
However, real estate contracts can negotiate who pays, so buyers and sellers should clarify this early.
County or Local Transfer Taxes
Unlike New York City, Suffolk County itself does not impose a separate additional transfer tax on every property sale. The main tax to plan for is the state transfer tax outlined above.
That said, specific areas within the broader region, like the Peconic Bay Region for community preservation funds, may have their own taxes or levies tied to real estate transfers. These are location specific and apply in certain towns only, not county wide.
Mansion Tax
New York State also has a mansion tax that applies when the sale price is $1,000,000 or more.
This is an additional 1.0% tax of the sale price, and buyers are typically responsible for this tax unless otherwise negotiated.
For a $1.2M sale, that means $12,000 on top of the standard state transfer tax.
Understanding this distinction is important because homeowners sometimes assume all transfer related costs are a seller cost. They are not.
Exemptions and Special Rules
There are limited exemptions under New York law for transfer tax on certain conveyances, such as transfers that merely change legal form of ownership or transfers to government entities. Some first-time homebuyer exemptions apply in specific towns using state programs.
If you think you may qualify for an exemption, talk to your attorney or tax advisor early in the process.
Transfer Tax and Calculating Your Costs
Knowing the tax formula helps you budget realistically.
Example calculations:
Sale price | State transfer tax
$300,000 | $1,200
$500,000 | $2,000
$1,000,000 | $4,000 + $10,000 mansion tax
$1,500,000 | $6,000 + $15,000 mansion tax
These are base tax costs before legal fees, title charges, inspections, and other standard closing costs.
Timing and How It Gets Paid
Transfer taxes are paid at closing, when the deed is officially recorded with the Suffolk County Clerk. Your attorney or title company will usually prepare the tax forms and handle the payment.
Why This Matters Locally
On Long Island, where property values can vary widely, the transfer tax line item moves meaningfully as sale prices rise or fall. Knowing these costs up front helps both buyers and sellers make confident decisions about net proceeds or offer terms.
Quick Checklist for Suffolk County Transactions
- Confirm who pays transfer tax in your contract.
- Budget for state transfer tax and mansion tax if applicable.
- Consult your attorney or title professional on exemptions.
- Ask for a full closing cost estimate early in the process.
Sources
1. New York State Department of Taxation and Finance
2. New York State Tax Law. Article 31 D. Real Estate Transfer Tax
3. Suffolk County Clerk. Deed Recording and Fee Schedule
4. EisnerAmper. New York Real Estate Transfer and Mansion Tax Overview
5. HomeLight. Suffolk County Transfer Tax Overview
6. Avenue Law Firm. Who Pays Transfer Taxes at Closing in New York
7. The Eric Berman Team. Long Island Seller Tax Breakdown
8. National Association of Realtors. Closing Costs and Transaction Norms