By Eric Berman, REALTOR® | The Eric Berman Team at Compass
TL;DR:
The NY Mansion Tax applies to residential sales of $1 million or more. For Long Island sellers in Nassau County, the rate is a flat 1% — the same as it has been since 1989. Inside NYC's five boroughs, including the Queens portion of the Long Island market, the tax runs on a progressive scale from 1% to 3.9%. Although the tax is paid by the buyer at closing, it shapes how every offer comes in around the $1M threshold, and it creates a real planning conversation for Long Island sellers in Manhasset, Port Washington, Garden City, Roslyn, Plandome, and other $1M+ markets.
What the Mansion Tax Is and Where It Came From
The NY Mansion Tax is an additional state real estate transfer tax that kicks in on residential property sales of $1 million or more. It was enacted in 1989 under Governor Mario Cuomo as a temporary "wealth tax" intended to target the very top of the New York market. At the time, $1M was a meaningful threshold — fewer than 5% of New York home sales crossed it.
The threshold was never indexed to inflation, and it has never been raised. Today, $1M doesn't buy what it bought in 1989. Across most of the North Shore of Long Island and Northeast Queens, $1M is now a routine price point for a standard single-family home — a 4-bedroom colonial in a quiet neighborhood, a renovated split-level near commuting hubs, or a townhouse in Garden City. The tax that was designed for genuine luxury estates now hits ordinary family homes in well-priced Long Island towns. Adjusted for inflation, the threshold today would be roughly $2.5M to $2.7M.
For Long Island sellers in 2026, the mansion tax is no longer a "luxury market" issue. It's a mid-market issue. Pricing strategy at the $1M boundary has become one of the most consequential planning conversations a seller has with their listing agent.
How It Works for Long Island Sellers Outside NYC
For sales in Nassau County — which covers Manhasset, Port Washington, Garden City, Roslyn, Plandome, Old Westbury, Sands Point, Locust Valley, and the rest of the North Shore and mid-Nassau market — the mansion tax is a flat 1% of the entire sale price on any residential transaction of $1M or more. There are no progressive tiers outside NYC. A $1.2M sale generates $12,000 in mansion tax. A $2.5M sale generates $25,000. A $5M sale generates $50,000. The math is simple, but the cliff at $1M is sharp.
The tax is technically the buyer's responsibility — it's filed on Form TP-584 and paid by the buyer at closing. But "buyer pays" doesn't mean "seller doesn't care." The buyer's all-in cost includes the mansion tax, and that cost shapes what they're willing to bid. A buyer with a budget of $1.05M who's seen the math knows that crossing the $1M line costs them an additional $10,500 on top of every other closing cost. That changes their offers, their negotiation posture, and sometimes whether they bid at all.
The cliff effect is the part that surprises Long Island sellers most. A buyer paying $999,000 pays zero mansion tax. A buyer paying $1,000,000 pays $10,000. The difference between those two prices isn't $1,000 — it's $11,000 in real money. Sellers pricing in the $999K to $1.05M dead zone often see their listings sit longer than comparables priced cleanly above or below the threshold.
How It Works in Northeast Queens (Bayside, Fresh Meadows, Jamaica Estates, Whitestone, Douglaston)
For Queens-portion sales, the math is different. Inside NYC's five boroughs, an additional NYC-specific mansion tax layers on top of the state rate, creating a progressive tiered structure. The 2026 brackets, applied to the entire purchase price (not just the amount above the threshold), are: 1% from $1M to $1.99M, 1.25% from $2M to $2.99M, 1.5% from $3M to $4.99M, and rising up to 3.9% on sales of $25M and above.
For Bayside, Fresh Meadows, Jamaica Estates, Whitestone, and Douglaston sellers, a $1.5M sale produces $15,000 in mansion tax (1%). A $2.5M sale produces $31,250 (1.25%). The cliffs at $2M, $3M, and $5M are smaller than the cliff at $1M, but they're real — a $5M sale generates $112,500 versus $74,750 just below the bracket boundary.
The same NYC tiers do not apply to Nassau County sales. A Long Island seller in Manhasset selling at $5M faces $50,000 in mansion tax, while a comparable seller in Manhattan would face $112,500. That differential — roughly $62,500 on a $5M sale — is one reason why the high end of the North Shore Long Island market draws buyers who might otherwise have bought in Manhattan or Brooklyn.
Why It Affects Sellers Even Though Buyers Write the Check
The simplest way to think about the mansion tax is that it changes what buyers can afford to bid. Every dollar a buyer has to set aside for mansion tax is a dollar that doesn't go to the purchase price. Sellers who internalize this early in the listing process tend to make better pricing decisions — and ultimately net more — than sellers who treat the tax as the buyer's problem.
There are three specific ways the mansion tax shapes seller outcomes:
The first is pricing strategy at the $1M threshold. A home that comparable analysis suggests is worth $1.02M to $1.05M sits in a difficult zone. Listing at $1,049,000 means the buyer pays $10,490 in mansion tax that they wouldn't pay at $999,000 — a $50,000 swing in effective cost for less than $50,000 of price. Many sellers in this position list at $999,000, accept that they may take a little less than the comparable analysis suggested, and benefit from a wider buyer pool. Others price at $1,029,000 with the explicit understanding that they're competing against $999,000 listings and will need to wait for the right buyer.
The second is negotiation flexibility. When an offer comes in below the $1M threshold on a home priced just above, the seller's instinct may be to push back on price. But the buyer's perspective often makes the lower offer rational: they're saving $10,000+ in mansion tax. A skilled listing agent helps the seller think through whether to hold the line, accept the offer, or counter at a number that still keeps the buyer below the threshold while protecting more of the seller's net.
The third is the upper-end cliffs in Queens markets. For Queens sellers near the $2M, $3M, or $5M brackets, the same dynamic plays out at higher numbers. A Bayside or Fresh Meadows home that comps at $2.05M might be better positioned at $1,999,000, with the seller's listing agent and real estate attorney working through the trade-offs together.
Pricing the $1M Boundary Carefully
For Long Island sellers whose homes are likely to value in the $950K to $1.2M range, the listing presentation should include an explicit mansion tax conversation. The right strategy depends on the home, the comps, the local micro-market, and the seller's timing flexibility. A few patterns hold consistently:
Homes that comp clearly above $1.05M generally do best when listed in the $1.05M+ range and marketed as crossing the threshold, with strong photography, video, and positioning that justifies the buyer paying mansion tax. Buyers in this range expect to pay it; what they want is a home that justifies the all-in number.
Homes that comp cleanly below $1M should usually be listed there. Pricing at $989,000 or $995,000 keeps the listing in the much larger sub-$1M buyer pool and avoids the cliff entirely.
Homes in the genuinely ambiguous zone — comping somewhere between $1M and $1.05M — are the difficult ones. Some sellers price at $999,000 to maximize buyer pool; some price at $1,025,000 to anchor higher and accept slower showings. Either approach can work; the wrong move is failing to think it through and listing at $1,019,000 by default.
A clear understanding of net proceeds at each price point makes this conversation easier. The home valuation tool is a quiet starting point for sellers who want a sense of their range before sitting down with a listing agent to walk through strategy.
What Doesn't Change With the Mansion Tax
Two things the mansion tax doesn't affect, even though sellers sometimes ask: it doesn't affect the seller's NY State Transfer Tax (which is a separate seller-paid tax of $4 per $1,000 of sale price), and it doesn't affect the seller's federal capital gains exposure. These are independent layers of the transaction. A seller's net proceeds calculation needs to account for all three — state transfer tax, capital gains, and the mansion tax's indirect effect on buyer behavior — but they're separate line items on separate tax forms.
For a fuller view of the seller's side of the closing math, the closing costs breakdown for Long Island sellers walks through every line item that hits the seller's proceeds.
Will the Threshold Ever Change?
There have been multiple legislative proposals in Albany in recent years to raise the $1M threshold. None has passed. The most recent serious effort, the proposed "Mansion Tax Adjustment Act," would raise the threshold to bring it more in line with current home values, but the bill has not advanced. The mansion tax generates an estimated $1 billion or more annually for state and city budgets combined, and that revenue is hard to give up.
For Long Island sellers planning sales in 2026 and beyond, the working assumption should be that the $1M threshold stays where it is. That makes the strategic conversation about pricing — whether to anchor above, position below, or thread the needle — a permanent feature of selling in Long Island's mid-market and luxury bands.
The Long Island Bottom Line
The mansion tax is the single most important pricing-strategy variable for any Long Island home likely to value at or near $1M. It's not optional, it's not avoidable through clever structuring, and it materially affects how buyers think about offers. Sellers who plan around it from the listing presentation forward — with their agent and attorney both at the table — generally make smarter pricing calls and net more at closing than sellers who treat it as a closing-day surprise.
For sellers in homes likely to push above $1M, the right time to think through mansion tax strategy is before listing — not when the first offer arrives. The choices are usually clearer with weeks to consider them than with hours.
Q: Who pays the NY Mansion Tax — the buyer or the seller?
A: The mansion tax is the buyer's legal responsibility. It's filed on Form TP-584 and paid at closing. However, in practical terms, the tax affects what buyers can afford to bid, which means sellers feel the impact through the offers they receive. On Long Island sales above $1M, sellers and listing agents always factor the mansion tax into pricing strategy and negotiation, even though the buyer writes the check.
Q: Is the Long Island Mansion Tax the same as the NYC Mansion Tax?
A: No. Outside NYC, including all of Nassau County, the mansion tax is a flat 1% on residential sales of $1M and above. Inside NYC's five boroughs, including the Queens portion of Long Island (Bayside, Fresh Meadows, Jamaica Estates, Whitestone, Douglaston), the tax is progressive — starting at 1% at $1M, rising to 1.25% at $2M, 1.5% at $3M, and continuing up to 3.9% on sales of $25M+. A $5M sale in Manhasset produces $50,000 in mansion tax. The same sale price in Queens would produce $112,500.
Q: Can a Long Island seller avoid the Mansion Tax by pricing just below $1M?
A: Yes — and many do. A sale at $999,000 generates zero mansion tax, while a sale at $1,000,000 generates $10,000. Pricing strategy in the $950K to $1.05M zone often anchors at $989,000 or $999,000 to keep the listing in the larger sub-$1M buyer pool. Whether this is the right move for any specific home depends on the comps, the property's actual value, and the seller's timing flexibility. The listing agent should walk through the trade-offs explicitly during the listing presentation.
Q: Does the Mansion Tax apply to condos and townhouses on Long Island?
A: Yes. The mansion tax applies to all residential property — single-family homes, condos, and townhouses — sold for $1M or more. The same flat 1% rate applies in Nassau County regardless of property type. Note that co-op transactions also trigger the tax inside NYC, but co-ops are not common in the Long Island market this content addresses.
Q: Will the $1M threshold ever be raised?
A: There have been multiple legislative proposals in Albany to raise the threshold to better reflect current home values, including a 2025 "Mansion Tax Adjustment Act." None has passed. The $1M threshold has been unchanged since 1989, and the tax generates significant state and city revenue, which makes legislative reform difficult. Long Island sellers should plan as if the $1M threshold will remain in place.
For sellers in Manhasset, Port Washington, Garden City, Roslyn, Plandome, Old Westbury, and the rest of the $1M+ Long Island market, the mansion tax is a permanent variable that shapes pricing strategy, buyer behavior, and net proceeds. Working through it deliberately at the listing presentation — with the listing agent and a real estate attorney both in the conversation — produces better outcomes than treating it as a closing-day formality. When the time is right to talk through what a sale looks like at a specific price point, with full mansion tax math on the page, the door is open.
By Eric Berman, REALTOR® | The Eric Berman Team at Compass
Eric Berman | Long Island & Queens REALTOR® | Compass 1468 Northern Blvd, Manhasset, NY 11030 (917) 225-8596 | eric@ericbermanteam.com | theericbermanteam.com
