New York transfer tax on rentals and LLC transfers

How much is New York's transfer tax on a rental purchase?

The base tax is $2 for each $500 of consideration, or 0.4%, and the seller pays it.

• The Department computes the tax at two dollars for each $500, or fractional part, of consideration.
• Publication 577 says consideration includes the amount of any mortgage, lien or other encumbrance on the property.

Exception: Inside New York City, additional state taxes apply at higher price points, and the city charges its own transfer tax.

According to the NYS Department of Taxation and Finance, Real estate transfer tax, page updated June 1, 2026, and Publication 577, as of October 2026.

Does the mansion tax apply to an investor buying a rental?

Yes for a one-, two- or three-family house at $1 million or more: the 1% additional tax applies because the house may be used as a residence, and in TSB-A-99(4)R the Department held that a buyer's intent not to live in the house was not relevant.

Exception: A four-family house falls outside the definition of residential real property in TB-RE-10, so it owes the base tax only.

According to the NYS Department of Taxation and Finance, TB-RE-10 and advisory opinion TSB-A-99(4)R, as of October 2026.

Is deeding my rental into my own LLC taxed in New York?

A deed into an LLC with the same beneficial owners is exempt as a mere change of identity or form of ownership, but only to the extent beneficial ownership stays the same.

• Tax Law 1405(b)(6) exempts conveyances that only change the identity or form of ownership with no change in beneficial ownership.
• The regulation, 20 NYCRR 575.10, applies that exemption to the extent beneficial ownership is unchanged.
• Applying that wording, an investor who deeds a two-family rental held in their own name to an LLC they own 100% would keep the same beneficial ownership, though no official source reviewed here addresses that exact case.

Exception: If the LLC adds an owner who wasn't on title, such as a partner, the share that changes hands falls outside the exemption. No official worked calculation for a partial change was found, so get that figure from the title company.

According to NYS Department of Taxation and Finance advisory opinion TSB-A-07(1)R, quoting Tax Law 1405(b)(6) and 20 NYCRR 575.10, as of October 2026.

Is selling an interest in the LLC that owns a rental taxed?

Yes once 50% or more of the entity changes hands, counting related transfers together, and the tax is figured on the property's fair market value times the percentage transferred.

• Publication 576 adds together transfers of interests in the same entity that occur within three years to decide whether a controlling interest has passed.
• At a 60% interest in an entity holding a $1,000,000 property, consideration is $600,000, so the base tax is $2,400.
• Publication 577 says the 1% additional tax also reaches a controlling interest in an entity that owns residential property worth $1 million or more.

Exception: Publication 576 defines a controlling interest as 50% or more, so a transfer that stays below 50% after adding interests transferred within three years does not meet that definition.

According to the NYS Department of Taxation and Finance, Publication 576 and Publication 577, as of October 2026.