October 15, 2019

October 14, 2019

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Increases in Transfer Tax Rates for New York City Properties

On July 1, 2019, transfer tax rates will change for sales of both commercial and residential properties in New York City.  This change will apply to closings on or after that date, except where taxpayers can produce written evidence that the sale was made pursuant to a contract entered into prior to April 1, 2019.  Rates applicable to sales of properties outside New York City remain unchanged.

Transfer Tax

For residential real estate in New York City (including residential cooperative and condominium units), the New York State transfer tax will increase to $3.25 for each $500 (or fractional part thereof) of consideration (or 0.65%) in the case of sales for $3,000,000 or more of consideration.

For commercial and industrial real estate in New York City, the new 0.65% rate will apply to sales for $2,000,000 or more of consideration.

In either case, if the threshold is met, the new rate will apply to the entire consideration, not just the amount above the threshold.

Mansion Tax

The “Mansion Tax” is a tax applicable to sales only of residential real estate, where the consideration is $1,000,000 or more.  It applies statewide, and the rate is 1% of the consideration.  On and after July 1, 2019, the rates for residential real estate in New York City will increase for sales of $2,000,000 or more.  The Mansion Tax will be payable as follows:

Amount of Consideration

Tax Rate

Less than $1,000,000

No Tax

$1,000,000 or more, but less than $2,000,000

1%

$2,000,000 or more, but less than $3,000,000

1.25%

$3,000,000 or more, but less than $5,000,000

1.5%

$5,000,000 or more, but less than $10,000,000

2.25%

$10,000,000 or more, but less than $15,000,000

3.25%

$15,000,000 or more, but less than $20,000,000

3.5%

$20,000,000 or more, but less than $25,000,000

3.75%

$25,000,000 or more

3.9%

Further, the Mansion Tax Law has been amended.  Previously, the tax was payable by the purchaser, except that the seller pays in the rare case in which the purchaser is exempt.  Under the new law, while the tax is payable by the purchaser, the seller is also liable for the tax if the purchaser fails to pay it.

© Copyright 2019 Sills Cummis & Gross P.C.

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About this Author

Mark Levenson, Real Estate Attorney, Sills Cummis, Retail Leasing lawyer
Member

Mark S. Levenson is a Chair of the Real Estate Department and Chair of the Corporate Real Estate Practice Group. He also chairs the Firm’s Israel Business Practice Group.

Mr. Levenson handles a broad range of transactions for domestic and international clients, including acquisitions, development, sale/leasebacks, leasing, lending, design and construction projects and corporate advisory work. Mr. Levenson has 30 years of experience in private practice including 8 years as the senior real estate lawyer at a major financial services institution....

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Stephen A. Linde Of Counsel Sills Cummis & Gross Law Firm
Of Counsel

Stephen A. Linde is Of Counsel to the Sills Cummis & Gross Real Estate Department. He is resident in the Firm’s New York office.  Mr. Linde has over thirty-five years of experience as a real estate attorney representing a variety of public and private companies and financial institutions.  His practice is national in scope and includes all aspects of commercial real estate, including real estate development; acquisitions and sales; office, retail and industrial leasing; financing; real estate joint ventures; and foreign investment in real estate.

212-500-1517