New York Real Estate Exam Math: Transfer Tax, Commission & Proration
Math problems for the New York real estate exam — NY transfer tax, mansion tax, commission calculations, and proration with worked examples.
Math questions appear on the New York exam. With only 75 questions total, each math question represents more than 1.3% of your score — you can't afford to give them away.
New York Transfer Tax
New York State imposes a real estate transfer tax on conveyances of real property.
Rate: $2 per $500 of consideration (or fraction thereof) - Equivalent to $4 per $1,000 or 0.4% of sale price
Example: A property sells for $875,000. - $875,000 ÷ $500 = 1,750 - Transfer tax: 1,750 × $2 = $3,500
Paid by: The seller (unless otherwise agreed)
Mansion Tax (Additional Tax)
For residential transfers of $1,000,000 or more, an additional 1% tax applies.
Example: A condo sells for $1,500,000. - Base transfer tax: $1,500,000 ÷ $500 × $2 = $6,000 - Mansion tax: $1,500,000 × 0.01 = $15,000 - Total transfer taxes: $21,000
Note: NYC also imposes a separate NYC Real Property Transfer Tax (RPTT) on transfers in New York City. The exam may test both state and city taxes separately.
Commission Calculations
Example 1: A property sells for $680,000. The broker charges 5% commission split 50/50 between listing and buyer's broker. The listing salesperson earns 60% of the listing side. Calculate the listing salesperson's earnings.
- Total commission: $680,000 × 0.05 = $34,000
- Listing broker side: $34,000 ÷ 2 = $17,000
- Salesperson (60%): $17,000 × 0.60 = $10,200
Example 2: A seller wants to net $540,000 after paying a 5% commission. What must the property sell for? - Sale Price × (1 - 0.05) = $540,000 - Sale Price = $540,000 ÷ 0.95 = $568,421.05
Proration
New York exams use 365 days per year for proration.
Property Tax Proration (taxes paid in advance in NY — opposite of Florida/Texas): If annual taxes of $6,570 are paid on Jan 1. Closing is March 31. - Daily rate: $6,570 ÷ 365 = $18/day - Days remaining after closing: April 1 – Dec 31 = 275 days - Buyer owes seller for unused days: 275 × $18 = $4,950 credit to seller
Mortgage Math
Monthly P&I Estimate: - Loan: $500,000 at 6.5% for 30 years - Using amortization factor of $6.32 per $1,000 (approximate for 6.5%) - Monthly payment: $500,000 ÷ 1,000 × $6.32 = $3,160/month
Points: - Each point = 1% of loan amount - 2 points on $400,000 loan = $400,000 × 0.02 = $8,000 paid at closing to reduce interest rate
Capitalization Rate
Example: A commercial building in Manhattan generates $180,000 NOI. Market cap rate is 4.5%. What is the indicated value? - Value = NOI ÷ Cap Rate = $180,000 ÷ 0.045 = $4,000,000
[Practice New York math at CARealestate.com/states/new-york](https://carealestate.com/states/new-york)
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