Good morning Stefanie,
A "Flip Tax" is a fee charged by a Cooperative when an owner of an apartment in the Co-Op sells the apartment. The Owner pays this fee to the Cooperative upon the sale of an apartment. The fee is meant to discourage Owners from coming in to a Co-Op and quickly selling for a higher price. Frankly, in my Humble Opinion, it's ridiculous and puts an onerous obstacle in the way of a real estate transactions.
Flip Taxes can be reasonable OR incredibly unreasonable. The tax is determined by a percentage of the shares owned by the apartment owner.
The Flip Tax affects a Buyer, too, even though the Owner pays it, not the Buyer. When you apply for your mortgage, we must subtract the Flip Tax from the purchase price to determine the maximum allowable loan for that apartment purchase. This is a direct affect on value.
If you have been Prequalified for a Cooperative loan (it's not really a mortgage), your Loan Officer should have explained this to you in detail at the time of Prequalification. If not, then you need to find yourself a new Lender to work with. If your L.O. left out something as important as the Flip Tax, imagine what other nasty surprises there are in store for you as you purchase your apartment!
You might also consider purchasing "The New York Co-Op Bible" as this is a valuable resource for Co-Op Buyers and Sellers and Owners.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services