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Showing posts from July, 2013

Legal Line Question of the Week: Transfer Taxes and Grossed up Consideration

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Legal Line Question of the Week - REBNYTransfer Taxes and Grossed up ConsiderationI represent the prospective purchaser of a new construction condominium 
unit. In speaking with the sales office for the sponsor, I was informed that 
my purchaser is responsible for paying both the New York City and 
New York State transfer taxes.  I thought that the obligation to pay transfer 
taxes was the responsibility of the seller.  Can you please explain?
Generally, when real property (or a co-op apartment) is sold in New York 
City, the seller is responsible for paying both the New York State and 
New York City transfer taxes.  In residential real estate transactions 
where the purchase price is greater than $500,000, the New York City 
transfer tax equals 1.425% of the purchase price (and where the purchase 
price is $500,000 or below, the New York City transfer tax is 1% of the 
purchase price).  The New York State transfer tax is .4% of the purchase 
price.
New York state law permits a seller to shift the…