Real Estate Math

Real Estate Math: Finance, Closing & Math Exam questions on real estate math appear on roughly 10% of the NY exam — meaning you can gain or lose around 15 points based purely on your ability to plug numbers into the right formula. Mastering these calculations is one of the fastest ways to boost your score. --- ## Why This Section Matters Unlike memorization topics, math questions are always solvable if you know the formula and follow the steps. The NY exam tests a predictable set of calculations: transfer taxes, commissions, mortgage math, income property valuation, proration, and depreciation. Every formula here is learnable. --- ## The Core Formulas ### Transfer Taxes New York imposes several transfer-related taxes. Know who pays and what rate applies. | Tax | Rate | Who Pays | Trigger | |---|---|---|---| | NYS Transfer Tax | 0.4% (0.004) | Seller | Any sale | | NYC Transfer Tax | 1.0% (<$500K) / 1.425% (≥$500K) | Seller | NYC sales only | | Mansion Tax | 1.0% (0.01) | Buyer | Residential ≥$1M | | Mortgage Recording Tax | ~1.8% (NYC) / ~0.5% (upstate) | Borrower | New mortgage recorded | > Memory tip: The mansion tax is the only one the *buyer* pays. All others fall on the seller or borrower. #### Worked Example — Transfer Taxes A property in NYC sells for $800,000. Calculate all applicable transfer taxes. 1. NYS Transfer Tax: $800,000 × 0.004 = $3,200 (seller pays) 2. NYC Transfer Tax: $800,000 × 0.01425 = $11,400 (seller pays — use 1.425% because ≥$500K) 3. Mansion Tax: $800,000 × 0.01 = $8,000 (buyer pays — residential ≥$1M) 4. Mortgage Recording Tax: If…