Tuesday, June 21, 2011

Who Pays What Tax When You Buy or Sell Your Home?

Depending on whether you purchase or sell your home or other property that you own, you may be responsible for New York State and New York City transfer taxes on the price of the property being sold.  Generally, the seller is responsible for both state and city transfer taxes in a sales transaction.  However, this responsibility can be passed on to the purchaser in a contract of sale or other agreement.  For example, generally, when buying into a  new condominium development, the developer will pass the burden of paying the transfer taxes onto the purchaser.  That means the purchaser should consider the amount of additional closing costs they will be paying, in the form of state and city transfer taxes, when buying into a new condominium development.  However, in a buyer's market, where real estate sales are not so frenzied, the developer may concede to bearing the burden of paying these transfer taxes or maybe half the taxes.  So how much are these transfer taxes? You can see some of the rates below.  And if you are planning to take a mortgage loan for your purchase, you will also be responsible for mortgage tax on the loan amount that you will be borrowing, as part of the closing costs that you will be incurring in your purchase.  See here for information on mortgage tax.


New York State Transfer Tax
Seller pays unless provided otherwise in a contract or other agreement.
Residential    $2.00 per $500.00 of the purchase price
Commercial    $2.00 per $500.00 of the purchase price
Residential property includes 1, 2, or 3 family dwellings, single unit coops and condos.


Real Property Transfer Tax
New York City
Seller pays unless provided otherwise in a contract or other agreement.
Residential property of $500,000.00 or less    1%
Residential property of more than $500,000.00    1.425%
Commerical property of $500,000.00 or less    1.425%
Commercial property of more than $500,000.00    2.625%

Mount Vernon
For both residential and commercial properties, tax rate is 1% of the purchase price minus $100,000.00.


Mansion Tax
Purchaser pays New York State a 1% mansion tax for residential property being purchased at $1,000,000.00 or more.  Residential property includes 1, 2, or 3 family dwellings, single unit coops, and single unit condos.  Mansion tax is not applicable to commercial property.

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