As a NY Title Insurance company, we often receive inquiries regarding the transfers of ownership for properties in New York. Though we do not prepare deeds in connection with issuing NY Title Insurance as it is considered the “practice of law”, we are happy to have one of our attorneys assist you with a transfer and even further one that is not involved in a typical real estate transaction.
In this post we’ll explain what the NY Transfer Tax is, the kinds of transfers it applies to, and who must pay the tax.
NY Transfer Tax
The state of New York imposes a real estate transfer tax on conveyances of real property when the consideration is greater than $500. The NY transfer tax rate is computed at two dollars for every $500 of consideration. If the property sale price is $1 million or more, an additional tax of 1% of the sale price is applied. This is often referred to as a “mansion tax.”
The seller pays NY transfer tax in a sale transaction. If the seller is exempt from the tax, the buyer must pay it. The buyer pays the “mansion tax,” but if the buyer is exempt, the seller must pay it. Exemptions will be discussed later in this post.
NYC Transfer Tax
New York City also has a Real Property Transfer Tax (RPTT) that must be paid in addition to the NY transfer tax. An RPTT must be paid on grants, sales, assignments, and transfers of real property in New York City. The tax also must be paid when transferring ownership of a cooperative apartment. Unless otherwise negotiated, the RPTT is paid by the seller.
NYC Transfer Tax Rates
The rate for residential transfers is 1% when the consideration exceeds $25,000 and is less than $500,000. The rate for residential transfers on considerations of more than $500,000 is 1.425%.
For nonresidential transfers, if the value is less than $500,000 the rate is 1.425%. If the value is over $500,000, the rate is 2.625%.
More information on the the RPTT can be found here: http://www1.nyc.gov/site/finance/taxes/property-real-property-transfer-tax-rptt.page
What Property Transfers are Exempt?
It is important to note that certain conveyances are exempt from the NY Transfer Tax. The most common exempt transfer is between family members, such as:
Re-titling real estate in two names after marriage
Transfers of real estate to younger generations in connection with estate planning
Transfers between parent and child, husband and wife, brother and sister, grandparent and a grandchild, etc.
Transfers to the United Nations, United States of America, or the state of New York are also exempt, as are transfers to secure debts or obligations, and transfers made by corporations in connection with mergers or consolidations.
For a complete list of NY Transfer Tax exemptions, visit this helpful page on the New York State Department of Taxation & Finance: https://www.tax.ny.gov/pdf/current_forms/property/tp584_fill_in.pdf
NY Title Insurance from World Wide Land Transfer
World Wide Land Transfer is a full-service NY Title Insurance company that provides Settlement and Escrow for all kinds of real estate transactions—everything from high-end NYC commercial transactions to home purchases. If you have any questions, please contact us at firstname.lastname@example.org.