New Transfer Tax Regulations

Posted by Casandra Properties on Friday, May 3rd, 2019 at 9:12am.

New York CityJames Thompson is a partner at Scamardella, Gervasi, Thomson & Kasegrande P.C and has shared his knowledge of the new Transfer Tax laws with us below.

 

In April 2019, New York State passed a budget that included substantial changes to the real estate transfer tax laws. A summary is below for your reference. The changes apply only to cities within New York State having a population of one million or more. Accordingly, practically speaking, these changes apply only to transfers of real property in New York City.

Generally, the new rates apply to any transaction closing on or after July 1, 2019. However, it is important to note that there is an exception for any transfers made pursuant to a Contract entered into on or before April 1, 2019 and closing after July 1, 2019. Those transactions will close under existing rates. Independent evidence must be given to prove that the Contract was entered into before April 1, such as a recording of the Contract or, more likely, proof that the Contract deposit was made before the applicable date.

As these changes are new, there are still some questions about the mechanics of how it will all work. For example, only NYS Department of Finance can approve the payment of the old rate for recordings after July 1, 2019. In that case, a seller may have to pay the new rate and apply for a refund along with the necessary evidence that the Contract was signed before April 1, 2019. Accordingly, we of course recommend that any specific scenarios you face be reviewed by an attorney to ensure that you are in compliance. The information provided in this email is simply for your general knowledge and reference.

Thank you.

The below table reflects the NYS transfer tax paid by the seller, subject to the exemptions and conditions contained in the New York State Tax Law.   

Consideration

Transfer tax Residential

Transfer tax non-Residential

Under $2,000,000.00

$2.00 per $500.00 (.4%)

$2.00 per $500.00 (.4%)

$2,000,000.00 to $3,000,000.00

$2.00 per $500.00 (.4%)

$3.25 per $500.00 (.65%)

$3,000,000.00 or more

$3.25 per $500.00 (.65%)

$3.25 per $500.00 (.65%)


The below table reflects the NYS Mansion tax paid by the buyer on residential property.

Consideration

New York Mansion Tax (including supplemental Mansion tax)

$1,000,000.00 or less

Not subject to tax

$1,000,000.00, to $1,999,999.99

1%

$2,000,000.00 to $2,999,999.99

1.25%

$3,000,000.00 to $4,999,999.99

1.5%

$5,000,000.00 to $9,999,999.99

2.25%

$10,000,000.00 to $14,999,999.99

3.25%

$15,000,000.00 to $19,999,999.99

3.5%

$20,000,000.00 to $24,999,999.99

3.75%

$25,000,000.00 or more

3.9%

 

Note 1: Generally, residential property is defined as property used in whole or part as a personal residence, and includes a 1, 2 or 3 family house, an individual residential condominium unit or a cooperative apartment. You should consult with an attorney to determine whether any questionable property is taxed as residential, i.e., a mixed-use property.

Note 2: All above taxes are in addition to the separate New York City Transfer Tax, which is paid by the seller.

 

 For further information, Mr. Thompson’s contact information is below:

James H. Thomson, Esq.

Partner | Real Estate & Commercial

Scamardella, Gervasi, Thomson & Kasegrande P.C.

1010 Forest Avenue

Staten Island, New York 10310

Tel: (718) 442-0900 | Fax: (718) 816-8037

jthomson@statenlaw.com | www.statenlaw.com

 

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