If you’re buying a co-op in New York City, you will not pay mortgage recording tax. That single fact — often buried in the fine print of a closing disclosure — can save a buyer tens of thousands of dollars compared with buying a condo at the same price. But the savings aren’t free money: co-op financing works through a completely different legal structure, and that structure comes with its own costs, its own lender requirements, and its own paperwork. This guide explains why the tax doesn’t apply, what you pay instead, and how to think about the difference when you’re comparing a co-op against a condo at the closing table.
What the Mortgage Recording Tax Is (and Who Collects It)
New York State imposes the mortgage recording tax under Article 11 of the Tax Law — specifically, Sections 253, 253-a, and 253-b. The tax is an excise on the privilege of recording a mortgage on real property. That last phrase is the key. The tax only attaches when you record a mortgage lien against real property — a deed-based interest — in the county clerk’s office.
In New York City, the combined state-and-city rates depend on loan size and property type (from Form MT-15, revised January 2025, the current version):
- All mortgages under $500,000: $2.05 per $100 of mortgage debt (2.05%)
- 1-, 2-, or 3-family homes and individual residential condo units, $500,000 or more: $2.175 per $100 (2.175%)
- All other mortgages $500,000 or more (commercial, mixed-use, large multifamily): $2.80 per $100 (2.80%)
The NYC City Register’s Office collects the tax when you record documents for Manhattan (New York County), Brooklyn (Kings County), Queens, and the Bronx. For Staten Island (Richmond County), you record in person at the Richmond County Clerk’s Office. The ACRIS system — the Automated City Register Information System — handles online filing for all four boroughs except Staten Island.
For help calculating the exact amount before closing, the NYC Department of Finance recommends using the ACRIS “Calculate Taxes / Fees” → “Mortgage Recording Tax” tab at acris.nyc.gov. Phone: ACRIS Help Desk (212) 487-6300. For NYC DOF general questions: 311 or (212) 639-9675. For New York State mortgage recording tax questions: NYS Department of Taxation and Finance at (518) 457-5431.
Why Co-ops Are Exempt: The Personal Property Distinction
A co-op apartment is not real property. That statement sounds strange — you live there, you pay a “mortgage,” you build equity — but legally it is precise and consequential.
When you buy into a cooperative building, you are not buying the four walls of an apartment. You are buying shares in a corporation that owns the entire building. Along with those shares, you receive a proprietary lease granting you the right to occupy your specific unit. The shares are personal property under New York law, the same legal category as stock certificates or a car. There is no deed. There is nothing to record in the county clerk’s real property records.
Because Article 11 of the Tax Law only taxes the recording of a mortgage “on real property,” and because a co-op share loan is secured by shares of personal property rather than by a deed interest in land, the mortgage recording tax simply does not apply. There is nothing to record. The lender perfects its security interest in the shares by filing a UCC-1 financing statement under Article 9 of the Uniform Commercial Code — a completely separate legal regime with no recording tax.
This is not a loophole or a gray area. It flows directly from the statutory language of NY Tax Law § 253 and has been consistently applied. The New York State Department of Taxation and Finance confirms in TSB-M-96(2)R that the mortgage recording tax is imposed on the recording of mortgages on real property. Co-op shares don’t qualify. End of analysis.
The Numbers: How Much the Exemption Is Worth
The savings are real and large. On a typical NYC co-op purchase:
- $500,000 share loan: A condo buyer would pay $10,875 in MRT (at the 2.175% residential rate). A co-op buyer pays $0.
- $800,000 share loan: Condo buyer: $17,400 in MRT. Co-op buyer: $0.
- $1,500,000 share loan: Condo buyer: $32,625. Co-op buyer: $0.
These figures are based on the rates in the January 2025 MT-15 and apply to one-, two-, or three-family homes and individual residential condo units. All numbers are rounded to the nearest dollar. Your actual tax depends on the exact mortgage amount and property type — use ACRIS to calculate.
What Co-op Buyers Pay Instead
Skipping MRT doesn’t mean a free closing. Co-op buyers face a different set of costs.
NYC Real Property Transfer Tax (RPTT) — Still Applies
The RPTT applies to transfers of “economic interests in real property,” and the NYC Administrative Code, Title 11, Chapter 21, explicitly includes cooperative corporation shares as a covered economic interest. So co-op buyers do pay RPTT on the purchase price.
Current NYC RPTT rates (confirmed via NYC DOF and ACRIS):
- Residential transfers under $500,000: 1% of consideration
- Residential transfers $500,000 or more: 1.425% of consideration
- Commercial transfers under $500,000: 1.425%
- Commercial transfers $500,000 or more: 2.625%
RPTT on a co-op is typically split between buyer and seller by contract (in NYC residential deals, the seller conventionally pays, but this is negotiable). The filing form is Form NYC-RPT, filed through ACRIS.
New York State Transfer Tax (TP-584)
The state real estate transfer tax under Tax Law Article 31 also covers cooperative shares. The basic rate is $2 per $500 of consideration (0.4%). For residential deals over $1 million, the NYS mansion tax adds 1% on top (with supplemental tiers up to 3.9% on deals over $25 million). The filing form is TP-584 (combined with TP-584-NYC for NYC deals), available on the NYS Department of Taxation and Finance website at www.tax.ny.gov.
UCC-1 Filing Fee
Your lender will file a UCC-1 financing statement to perfect its security interest in your co-op shares. This is the functional equivalent of recording a mortgage — it puts future creditors on notice — but the cost is a flat filing fee of roughly $40–$50 with the NYS Department of State (not a percentage tax). There is no UCC-1 recording tax.
Recognition Agreement and Lender Requirements
Co-op lenders require a recognition agreement — a three-way contract among the lender, the co-op corporation, and you as the borrower. The co-op board must approve both the sale and the financing. This adds time and paperwork but no additional state tax. Some boards impose a co-op flip tax (a transfer fee paid to the building’s reserve fund on resale), which is set by the building’s proprietary lease and not a government tax.
The CEMA Option: When MRT Savings Apply to a Refinance
If you later refinance a condo or house (real property), you can reduce MRT via a Consolidation, Extension, and Modification Agreement (CEMA). With a CEMA, you only pay MRT on the new money advanced — not the rolled-over principal from the old loan. Co-op refinances don’t use CEMAs because there’s no MRT to reduce in the first place; your lender simply files an amended UCC-1.
Practical Takeaways at Closing
If you are buying a co-op:
- Your closing disclosure should show $0 for mortgage recording tax. If it shows a positive number in that line, flag it immediately with your real estate attorney.
- You will see a UCC-1 filing fee (small flat amount) — that is correct and expected.
- You will pay RPTT and NYS transfer tax based on the purchase price, not the loan amount.
- Your lender will require a recognition agreement — budget time for the co-op board’s review of the lender as well as of you as the buyer.
If you are deciding between a co-op and a condo at the same price point, the MRT savings (which can be $10,000–$40,000 or more depending on your loan) should be weighed against the condo’s simpler financing, easier sublet rights, and no board approval requirement.
Where to Get Help
- NYC Department of Finance — ACRIS Help Desk: (212) 487-6300. Use ACRIS to calculate taxes, file RPTT, and record documents for Manhattan, Brooklyn, Queens, and the Bronx. Website: acris.nyc.gov
- Staten Island / Richmond County Clerk: Documents must be recorded in person. Phone: (718) 675-8700.
- NYC DOF General Inquiries: 311 or (212) 639-9675 (out-of-city). Available 24 hours.
- NYS Department of Taxation and Finance — Mortgage Recording Tax: (518) 457-5431. For Form MT-15 technical assistance: (518) 457-8637.
- NYS DOT&F website: www.tax.ny.gov/pit/mortgage/mtgidx.htm for MRT forms and guidance. Form MT-15 (1/25) is the current rate schedule form.
- Legal authority: NY Tax Law Article 11 (§§ 253, 253-a, 253-b) for state MRT; NYC Administrative Code Title 11, Chapter 26 for the NYC portion; NYC Admin Code Title 11, Chapter 21 for RPTT including cooperative shares.
Tax information in this article is informational only and reflects law and agency guidance as of the publication date. Consult a tax professional or the NYC Department of Finance for your specific situation before closing.
