How are you? I hope you enjoyed your Thanksgiving. Filippa has provided you with the most comprehensive & accurate response so the only thing I'll add is that If the property is $1 million or more then an additional tax ("mansion tax") equal to 1% of the sale price is also assessed. The additional 1% is paid by the buyer. Since you didn't state how much you're selling for, not sure if that's relevant or not. I wish you the best for a successful transaction.
Hereâ€™s the official site where youâ€™ll get more info re: the NYS tax http://www.tax.ny.gov/bus/transfer/rptidx.htm
Hereâ€™s the official site where youâ€™ll get more info re: the NYC tax http://www.nyc.gov/html/dof/html/business/business_rec_rptt.shtml
Licensed Real Estate Salesperson
Apartment updates available at http://www.christinegordon.postlets.com
"Home is where the heart is."
A flip tax is a private transfer fee that many new york coops impose on shareholders. In the late seventies and early 80's when many rental buildings converted, huge profits were being made by former renters who bought their units at inside prices and then resold them. Called "flipping" The boards decided to impose the private transfer fee and call it a "flip tax" on sellers to dissuade flipping.
Today many buildings need to build their reserve fund and finances so they have imposed flip taxes. In order for the flip tax to pass 2/3 of the shareholders have to vote in favor of it. A "flip tax"or private transfer fee is considered a restrictive covenant by lenders.
Transfer taxes are imposed by NYC and NY state. They are government imposed taxes.
New York City Transfer Tax 1% of price up to $500,000,
plus $25.00 recording fee, and 1.425% of price over $500,000.
New York State Transfer Tax $2.00 per $500.00 of sales price
New York state also has a mortgage recording tax that buyers with a mortgage pay (1.75%) and a mansion tax that buyers of properties above $1 million pay (1% of sale price)
I currently have several coop listings with "flip Taxes" (private transfer fees) An experienced listing broker should certainly know the difference between government taxes and private transfer fees called "flip tax."
Lic. Assoc. R.E. Broker
It is true that a flip tax is a fee a seller of a co-op pays to the board when they sell. It can be a flat fee, a percentage of your profit, a percentage of the sale price, or a fee per share. It is to help "beef up" the reserve fund.
Transfer taxes are NYC and NYS taxes when the property is transferred. On a resale the seller pays it. Usually in a new development, the first buyer of a unit pays it. This is applicable to both co-ops and condos. The rates are: 1% up to $500,000 and 1.425% over $500,000 for NYC. For NYS the rate is $4 per $1,000 of price.
Halstead Property, LLC
Flip taxes are imposed by coops on the transfer of shares. In most cases, the flip tax is payable by the seller, but there are numerous instances where it is imposed on the buyer. How much a flip tax is varies from building to building
Licensed Real Estate Associate Broker
681 Lexington Avenue
New York, NY 10022
Phone 212-688-8530 x223 Cell 917-991-2528 Fax 212-758-7495
Any broker/agent telling anyone that a Flip tax and Transfer taxes are the same should be ran away from and shunned. This is not a Real Estate Professional. It is a newbie or a jaded licensee who either needs to get their thing together or just leave the profession. There is no excuse for not knowing the difference. We are the Professionals and ignorance is no excuse. They didn't know? They're supposed to know full stop.
You are correct: Flip Tax and Transfer Tax is not the same thing.
The individual co-op building's Flip tax (most commonly paid by by the seller) to the building's reserve fund (condo Flip Taxes are extremely rare). This "tax" is different from the New York City RPTT (Real Property Transfer Tax), paid by the seller, as well as the New York State Transfer Tax, also paid by the seller.
You should really always talk to your accountant and your real estate attorney about any specific questions you have regarding taxes, but below is the general guide lines:
For the RPTT if the sales price of the unit is $500,000 or less, the rate is 1% of the sales price, and if the sales price is more than $500,000 the rate is 1.425%.
The New York State Transfer Tax is computed at a rate of two dollars for each $500 (0.4 %) of the sales price. These taxes are customarily paid by the seller, unless it is a sponsor sales in a new construction, in which case this tax duty is commonly passed along to the buyer.
Best of luck with the sale of your apartment. Below is a link to Town's Sellers Guide. That will give you even more detailed information on what it will cost you to sell.
See below a link for additional information concerning NY Transfer tax.
I hope this answered your question! If you have any further questions, please feel free to contact me by the ways below.
Wishing you all the best,
De Vonte Williamson , LSA
Proudly Serving Long Island
Coldwell Banker Residential
"I Stand Behind Getting You Results!
Flip Tax is a Co-op Board charges from Sellers, as share holder, his/her is selling apartment unit . Some Co-op, when own the Land, they do not have a Proprietary Lease and no Flip Tax.
Then there is New York City Transfer tax= 1 % of sale price up to $ 500,000 or 1.425% of sale price if $ 500,000 and over, plus $ 25 administrative fee
and New York State Transfer Tax- $ 4 per $ 1000 of sale price
So, the answer is,: you have your flip tax , your NY State transfer tax and your NY City Transfer tax
If you need any assistance olease contact me at email@example.com