Section 1402-a of the New York Tax Law imposes a 1% tax on any sale of any residential property with a purchase price equal to or over $1,000,000.00. This tax is reported on the transfer tax return (form TP-584). Whereas transfer taxes are generally paid by the seller, the mansion tax is paid by the purchaser at the time of closing. If a portion of the property is non‑residential in character, it may be possible to allocate the purchase price between the residential and non-residential portion of the property, thereby reducing, or in some cases, eliminating this tax. However, the New York State Tax Department will frequently audit these allocations, so it is important to review all of the property details and regulations carefully with an attorney.