Hidden Costs of Buying Property in NYC: What You Need to Know

by Bill Bekisz

Buying property in New York City is an exciting venture, but it comes with more than just the listing price. Many buyers—especially first-timers—find themselves caught off guard by unexpected expenses that can quickly add up. To ensure you’re financially prepared, here’s a breakdown of the hidden costs of buying property in NYC.

1. Closing Costs

Closing costs in NYC can be substantial, often totaling between 2% and 5% of the purchase price. These costs include:

Attorney Fees ($2,000–$5,000)
Title Insurance (typically 0.5% of the purchase price)
Bank Fees ($750–$3,000, depending on the lender)
Recording Fees ($250–$1,000)
Mansion Tax (applies to properties over $1 million, ranging from 1% to 3.9%)

2. Co-op & Condo Fees

If you’re buying a co-op or condo, be prepared for additional expenses:

Board Application Fees ($500–$2,000)
Move-in/Move-out Fees ($500–$1,500)
Capital Contribution Fees (one-time payments that some buildings require, often equal to 1–2 months’ common charges)
Flip Tax (a fee paid by the seller, but sometimes negotiated into the deal)

3. Property Taxes & Escrow Payments

Unlike other states, NYC property taxes vary depending on whether you purchase a co-op, condo, or townhouse. Lenders often require buyers to prepay property taxes into an escrow account, which can be a significant upfront cost.

4. Mortgage Recording Tax

If you’re financing your purchase, be aware of NYC’s mortgage recording tax, which applies to condos and townhouses but not co-ops. This tax is:

1.8% on loans under $500,000
1.925% on loans over $500,000

On a $1 million loan, that’s an extra $19,250!

5. Home Inspections & Appraisals

While not required for co-ops, inspections are essential for condos and townhouses. These costs include:

Home Inspection ($300–$1,500)
Appraisal Fee ($500–$1,500)

6. Renovation & Repair Costs

Even if your new home looks perfect, minor fixes and upgrades can add thousands to your budget. If you’re buying in an older building, be prepared for unexpected maintenance.

7. Furniture & Moving Costs

Moving in NYC isn’t cheap. Hiring professional movers can cost between $1,000 and $5,000, and furnishing a new place adds another financial layer.

Final Thoughts

Before buying a property in NYC, it’s crucial to budget for these hidden costs to avoid financial surprises. Working with an experienced real estate agent and attorney can help you navigate the process smoothly. Are you planning to buy in NYC? Let’s talk about how to prepare for these extra expenses!