New York imposes a real estate transfer tax on the seller of real property (inclusive of cooperative apartments), or transferor of an interest in real property, where the consideration is greater than $500. New York also imposes a “mansion” tax on transfers of residential real property where the consideration is $1,000,000 or more, but, unlike the transfer tax, the mansion tax is imposed on the buyer of the property rather than the seller.
Changes to NYS Real Estate Transfer Tax in NYC Transactions
The New York State Senate and Assembly recently passed legislation changing the State real estate transfer taxes that apply to certain conveyances occurring on or after July 1, 2019. These changes impose a more progressive rate structure (without reducing the current transfer tax rate of 0.4% on most transactions) on certain conveyances made in “cities with a population of one million or more.” Accordingly, nowhere outside of New York City is affected by the legislation.
Under the new legislation for (i) residential property in NYC with a sales price of $3 million or more and (ii) other (non-residential) property in NYC with a sales price of $2 million or more, there will be an additional transfer tax of 0.25% bringing the total New York State real estate transfer tax to 0.65% on these transactions. For NYC commercial transactions under $2 million and NYC residential transactions under $3 million, the New York State transfer tax rate remains at 0.4%
Changes to NYS “Mansion” Tax in NYC Transactions
The new legislation preserves the mansion tax of 1% as a base rate on transactions where the consideration is $1 million or more, but imposes an additional “progressive” mansion tax on top of it, ranging from 0.25% on transfers for $2 million or more of consideration to 2.9% on transfers for $25 million or more of consideration.
In addition to the New York State real estate transfer tax and “mansion” tax, New York City has its own local real property taxes that were not impacted by the new legislation. More information can be obtained by contacting the real estate attorneys at Keane & Beane. For more information, contact Patrick J. O’Sullivan. You may also request to be added to future Legal Alerts on this topic.