NYC Mortgage Recording Tax Explained — 2026

By Nitin Gadura · April 23, 2026

If you're buying in NYC with financing, the mortgage recording tax (MRT) is one of the biggest single line items on your closing disclosure — and one of the most misunderstood. It's a tax on the loan amount, not the purchase price. Co-ops are exempt. Condos and houses aren't. And if you're refinancing, a CEMA can save you thousands that most buyers never hear about. Here's the full breakdown.

The Rates in 2026

For residential property in NYC, mortgage recording tax is tiered based on loan amount [1]:

The math is applied to the entire loan amount, not just the amount above $500,000 — so crossing that threshold is a small cliff.

The tax is split three ways:

• NY State basic tax: 0.5%
• NYC additional tax: 1.0% (under $500K) or 1.125% ($500K+)
• MTA tax: 0.3% (applies throughout the downstate MTA district — NYC plus Nassau, Suffolk, Westchester, Rockland, Putnam, Dutchess, Orange)

Lender pays 0.25% of the total, by NY law. So the buyer's actual out-of-pocket is 1.8% − 0.25% = 1.55% under $500K and 1.925% − 0.25% = 1.675% at $500K+.

Real-Dollar Examples

That's real money. On a typical Queens purchase, MRT is the single largest buyer closing cost after the down payment itself.

The Co-op Exemption — Why Co-op Buyers Celebrate

Here's one of the best-kept secrets in NYC real estate: co-op purchases are exempt from mortgage recording tax because what you're financing isn't a mortgage on real property — it's a loan against your shares in the cooperative corporation, secured by a UCC-1 filing, not a mortgage recorded against real estate [2].

Practical effect: on a $600K co-op purchase financed with $480K of debt, a buyer saves roughly $8,000 compared to the same financing on a comparable condo.

This is one of the structural reasons co-ops in neighborhoods like Glen Oaks, Rego Park, Forest Hills, and Jackson Heights trade at a meaningfully lower price per square foot than condos with similar amenities. Read our co-op board package guide for more on the co-op purchase process.

The CEMA — How to Save on Refinance

A Consolidation, Extension, and Modification Agreement (CEMA) is how refinancing homeowners in NY can avoid paying MRT on the unpaid principal of their existing mortgage [3].

How it works

Instead of paying off your old mortgage with the new loan (which would trigger full MRT on the new loan amount), the old lender assigns the remaining principal of your existing mortgage to the new lender. The new lender then extends only the additional borrowing. You pay MRT only on the incremental new money, not the full new loan.

Real-dollar CEMA example

The catch: CEMA processing typically costs $750–$2,500 in attorney and lender fees, and the old lender must cooperate (most do, but not all). Net savings on a $400K+ refinance usually still runs $5,000+.

What Happens on Purchase-CEMAs

Less common but powerful: a purchase-CEMA lets a buyer assume (and then modify) the seller's existing mortgage. The buyer pays MRT only on the new-money portion rather than the full new loan. This works best when:

• Seller's mortgage rate is below the buyer's new-loan rate (rare in a rising-rate environment, very attractive in a falling one)
• Seller's lender agrees to assignment
• Buyer's lender is willing to work with an assignment + modification structure

Purchase CEMAs are complex legal instruments requiring both lenders and both attorneys to coordinate. Don't try to negotiate one without experienced counsel.

The $500,000 Cliff — When to Negotiate Financing

Because MRT jumps from 1.8% to 1.925% the moment loan amount crosses $500,000, there's a modest cost to borrowing exactly $500,000 vs. $499,999. Roughly $625 additional tax for crossing the line. Not a huge difference on a big purchase, but worth knowing when financing structure is being finalized.

When MRT Does Not Apply

• Co-op share loans — exempt (see above)
• All-cash purchases — no mortgage, no recording tax
• HELOC / second mortgages on co-ops — exempt
• HELOC on condos or houses — MRT applies to the principal drawn at closing
• Seller-financed purchases without a recorded mortgage — typically not subject to MRT, but check with attorney

Comparison With Other Closing Costs

On a typical Queens condo purchase at $800K with 20% down ($640K loan), the major buyer closing costs are roughly:

MRT alone is about 50% of total buyer closing costs on a typical financed Queens purchase. This is why we always include it in closing cost projections. See our full NYC closing costs guide.

How to Reduce Your MRT Exposure

1. Put more down. Every $10,000 shifted from loan to down payment saves $167.50 in MRT. Meaningful on big purchases.
2. Consider a co-op. If you're flexible on property type, co-ops avoid MRT entirely.
3. Negotiate a seller MRT credit. Sellers occasionally credit a portion of MRT at closing in tight negotiations — especially on aged listings. Your broker handles this.
4. Use a CEMA on refinance. Standard practice but only if you ask.
5. Understand the $500K tier. Borrowing $500,001 vs. $499,999 costs ~$625 extra. Structure accordingly if you're at the edge.

MRT in Nassau & Suffolk

The same 0.5% NY State basic tax and 0.3% MTA tax apply outside NYC, but the NYC additional tax (1.0%/1.125%) does not. Combined buyer-side MRT on Long Island typically runs 0.8% of loan amount for most purchases — meaningfully less than NYC. See our Long Island tax guide for broader LI tax context.

Related Reading

Tax rates, tier thresholds, and CEMA procedures change. Confirm current figures with your NY-licensed real estate attorney and lender before relying on these numbers for a specific transaction. Not legal or tax advice. Commissions are negotiable and not set by law. Equal Housing Opportunity. Nitin Gadura, Gadura Real Estate, LLC.