Home Buying in Bellerose>Question Details

Skat28, Home Buyer in Queens, NY

I just received my Good Faith Estimate. What is a transfer tax? What is the typical amount for a single family home in the Queens, NY area?

Asked by Skat28, Queens, NY Sat May 29, 2010

The purchase price is $400,000 with 5% down (FHA loan) and annual taxes are $2,800.

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Joseph Hastings’ answer
Hi Skat28. Transfer tax is a little invention by state and city government to get their hands in your pocket yet again just because you want to buy property.

While I agree with Ms. Gladstone about the seller paying these fees for residential property, many sellers do try to put them on the buyer. A sharp broker and your attorney will look out for this ploy and nip it in the bud.

While it is common practice for new Condo construction to throw these taxes on the buyer, even they have been negotiable since the market softened. Prior to this current market, there was simply no room to negotiate as developers were adamant. The problem there is you would pay the tax for buying and later when you sold, you would pay it yet again!

Here's the percentages. At $400K the amount of transfer tax for the City is 1% ($4K) of the purchase price. The State takes less at .004% ($1600). If the amount was $500K or more the City would impose the tax at 1.425% while the State percentage would remain the same. If you bought a home at $1M or more, the City has a little invention called the "Mansion tax" which would be yet an additional 1% of the total price.

I hope this helps. Good luck with your purchase.
1 vote Thank Flag Link Sun May 30, 2010
If you are the buyer, the seller should be paying the transfer tax ...unless... you are purchasing a bank owned property in which case you may be stuck with it.

Again...the SELLER pays transfer tax.
Web Reference: http://GailGladstone.com
1 vote Thank Flag Link Sun May 30, 2010
To Mr. Silverberg: I was well aware of all of these charges including the upfront mortgage insurance premium for FHA loan. I just wanted to confirm these fees with Professionals like yourself and others on Trulia to make sure these are all legitimate fees. There have been a lot of fraudalent cases in the Queens area. There have been mortgage brokers who have added unnecessary closing fees to buyers. I don't expect such behavior from a bank, but as a buyer I think it is important to be well informed about all facets of the home buying process. I hope you would probably agree with this.
0 votes Thank Flag Link Mon May 31, 2010
Generally on a short sale the buyer pays the transfer tax, and it doesn't have anything to do with whether you are using the same lender for your loan. When you buy a short sale, the old lender has to approve it, but you are technically purchasing from the current owner who doesn't have enough money to pay the loan off in full, so certainly doesn't have money to pay the transfer tax. In addition to this, the new GFE is rather confusing because NY is one of the few, if not only, states that has a mortgage tax. Florida and Virginia both have taxes that are paid by the buyer, but they are called other things. So, there is no place on the new GFE that is labeled mortgage tax, so it comes up as a transfer tax. Buying a short sale in Queens with 5% down, you are paying approximately 3.2% for taxes alone between mortgage and transfer tax, plus the GFE will show the up front MIP fee of 2.25%, your total will be over $20,000 before you even add your title charges, escrows, bank fees and bank attorney fee. I am sure it looked scary when you saw it.
0 votes Thank Flag Link Mon May 31, 2010
Your attorney can best answer your question if transfer taxes are applicable in your situation--generally the seller pays.
0 votes Thank Flag Link Mon May 31, 2010
Well...I'm actually purchasing a shortsale property. The bank from which I'm getting the mortgage is also the original owner's bank, so it basically the bank handling the shortsale. In this case I'm assuming that I have to pay the transfer tax. Is that correct?
0 votes Thank Flag Link Sun May 30, 2010
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