Are you budgeting for a purchase in Locust Valley and wondering why your closing numbers keep creeping up? You are not alone. Investors often focus on price and renovations, then get surprised by state taxes and county fees at the closing table. In this guide, you will see the specific New York taxes and Nassau County charges that can add thousands to your bottom line, plus a simple checklist to keep you ahead of deadlines. Let’s dive in.
The hidden line items in Locust Valley closings
Buying on Long Island comes with New York State taxes that apply statewide and county fees that vary locally. You want both sets on your worksheet from day one. The biggest surprises are the 0.4% New York transfer tax, the 1% mansion tax at 1,000,000 dollars or more, and the mortgage recording tax on financed deals. Nassau County recording and processing fees, title insurance, and building transfer fees can stack on top.
New York transfer tax: the 0.4% you feel
New York imposes a real estate transfer tax on most deed transfers. The standard rate is 0.4% of the purchase price. It is reported on Form TP‑584 and paid when the deed is recorded. Payment responsibility is often allocated in your contract, but the party recording typically handles filing and payment.
- Example: A 950,000 dollar purchase has a 3,800 dollar transfer tax.
- Tip: Confirm who completes TP‑584 and who pays the tax before you sign the contract.
- Resource: You can review current guidance through the New York State Department of Taxation and Finance for transfer tax and TP‑584 filing requirements. Visit the department’s site to locate the latest forms and instructions at the New York State Department of Taxation and Finance.
Mansion tax: when 1% kicks in
If your residential purchase price is 1,000,000 dollars or more, New York charges a separate 1% mansion tax. This applies to 1 to 3 family homes, condos, and residential co‑ops.
- Example: A 1,200,000 dollar purchase carries a 12,000 dollar mansion tax.
- Custom in many contracts: The buyer pays, but you can negotiate. Put it in writing early.
- Resource: For current rules and definitions, use the New York State Department of Taxation and Finance.
Mortgage recording tax in Nassau County
If you finance your purchase, New York assesses a mortgage recording tax when the mortgage is recorded. Rates include state and local components and vary by location and mortgage structure. The amount can be several thousand dollars, based on the mortgage amount and local schedules. In many transactions, the borrower pays this tax, but you should confirm expectations with your lender and attorney.
- Action step: Ask your lender for a Loan Estimate with the mortgage recording tax itemized.
- Local check: Confirm the current Nassau County rate and any applicable surcharges with the Nassau County Clerk or your title company. Start at the county’s official site: Nassau County.
Nassau County clerk and local fees
Beyond state taxes, closings in Nassau County often include smaller line items that add up.
- Deed recording and indexing fees per page.
- Mortgage satisfaction recording, releases, and miscellaneous clerk processing charges.
- Courier or e‑recording service costs if applicable.
Your title company can estimate these once they know the document count and page length. Ask for a written estimate before you waive contingencies.
Lien searches and property tax proration
Locust Valley properties can carry municipal or special district charges that must be cleared or prorated at closing.
- Order municipal lien searches early for water, sewer, and special districts.
- Verify property tax proration across county, town or village, and school district bills.
- Confirm payoff demands for any judgments or penalties so there are no last‑minute delays.
Title insurance, surveys, and endorsements
Title costs are easy to underestimate. You will likely need an owner’s policy and, if you have a loan, a lender’s policy. Endorsements, survey updates, and resolving title exceptions can add cost, especially on older parcels.
- Ask your title company for a full premium quote with endorsements.
- If boundaries are unclear, budget for a survey or an endorsement that meets lender requirements.
Co‑ops and condos: board and transfer fees
If you are buying a co‑op or condo, expect building‑specific costs. These can include application and processing fees, move‑in deposits, estoppel or questionnaire fees, and possible flip taxes. Who pays a flip tax varies by building, so ask management for the current fee schedule and confirm it in your contract.
Entity buys, UCC, and 1031 exchange details
If you purchase through an LLC or buy an interest in an entity that owns real property, plan for UCC searches and possible filing fees. If you intend to complete a 1031 exchange, include qualified intermediary fees, potential extended closing timelines, and additional coordination with your title and escrow teams.
- Foreign seller alert: If a seller is a foreign person, FIRPTA withholding can apply. Buyers and brokers may need to coordinate paperwork. For general federal guidance, visit the IRS and search for FIRPTA.
Example cost snapshots
Here are illustrative scenarios to show the scale of state taxes before adding local fees and title.
Purchase at 950,000 dollars
- NY transfer tax at 0.4 percent: 3,800 dollars.
- Mansion tax: 0 dollars.
- Mortgage recording tax and local fees: variable. Ask your lender and title company for a precise figure.
Purchase at 1,200,000 dollars
- NY transfer tax at 0.4 percent: 4,800 dollars.
- Mansion tax at 1 percent: 12,000 dollars.
- Combined state taxes: 16,800 dollars before mortgage recording tax, recording fees, or title.
Your pre‑closing checklist
Use this to keep your numbers tight and your timeline smooth.
Before contract
- Confirm whether your price will trigger the 1 percent mansion tax.
- Ask your lender for a Loan Estimate that lists mortgage recording tax and lender fees.
- Request a title quote that includes owner’s and lender’s policies and expected recording fees.
- If buying through an entity, consult counsel about transfer tax filings and structure.
Pre‑closing
- Order municipal lien and UCC searches.
- Confirm who prepares TP‑584 and who pays the transfer and mansion taxes.
- Verify mortgage recording tax amount and who pays it; list it on the closing statement.
- Get the board’s fee schedule if buying a co‑op or condo, including any flip tax.
At closing
- Confirm transfer tax and any mansion tax are paid and receipted.
- Verify deed and mortgage are recorded and scheduled for filing.
- Keep copies of all receipts and recorded documents.
How to confirm current rates
Rates and procedures can change. Rely on primary sources and your local professionals.
- For state taxes, forms, and instructions, use the New York State Department of Taxation and Finance.
- For county recording fee schedules and clerk procedures, start with Nassau County and the County Clerk resources.
- For federal withholding when a seller is foreign, search FIRPTA at the IRS.
Work with a local advocate
The fastest way to protect your return is to build an accurate, itemized closing budget before you submit your offer. A local attorney, title company, and lender can confirm the exact mortgage recording tax, county recording fees, and any building transfer costs so there are no surprises on closing day.
Ready to run the numbers for your Locust Valley purchase and map out a clear closing plan? Connect with Unknown Company for a confidential, high‑touch consultation that puts your goals first.
FAQs
What taxes apply to a 1.2 million dollar Locust Valley purchase?
- Expect a 4,800 dollar New York transfer tax at 0.4 percent and a 12,000 dollar mansion tax at 1 percent, plus mortgage recording tax and local recording and title fees.
Who usually pays New York’s mansion tax in Nassau County?
- The buyer typically pays in many contracts, but allocation is negotiable. Confirm the responsibility in your purchase agreement and closing statement.
How is the mortgage recording tax calculated for Nassau County?
- It depends on the mortgage amount and local rate components. Ask your lender for the itemized amount and confirm current rates with the Nassau County Clerk or your title company.
Do co‑ops and condos on Long Island have extra transfer costs?
- Yes. Expect application and processing fees, possible flip taxes, and move‑in deposits. Ask building management for the current fee schedule and confirm in your contract.
What lien searches should investors order in Locust Valley?
- Order municipal lien searches for water, sewer, and special districts, along with UCC searches if purchasing through an entity. Clear or prorate any outstanding charges before closing.
Can I avoid the mansion tax by buying through an LLC?
- No. The 1 percent mansion tax triggers on the purchase price of residential property. Attempts to split or re‑allocate consideration can be risky and should be reviewed by counsel.
