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Real Estate
Department
August 14, 2002
Real
Estate Transfer Taxes: Tax Rates Generally Applicable
to New York City Real Estate Transactions
Taxes Payable by Seller
I. New York
City Real Property Transfer Tax
(For purposes of the New York City Real Property
Transfer Tax, residential property is classified as 1, 2 or 3 family houses,
individual residential cooperative apartments and individual residential
condominium units. All other properties are classified as commercial).
Type of Property Affected
Tax Rate
Residential property where consideration is $500,000 or
less
.......................................................................... 1%
of gross consideration
Residential property where consideration is more than
$500,000 .......................................................... 1.425% of
gross consideration
Commercial property where consideration is $500,000 or
less .............................................................. 1.425% of
gross consideration
Commercial property where consideration is more than
$500,000 ...................................................... 2.625% of
gross consideration
II. New
York State Real Estate Transfer Tax
Type of Property Affected
Tax Rate
All types (regardless of
consideration)
........................................................................................
$2.00 per $500 of gross consideration or
fraction thereof
Taxes Payable by
Purchaser
III. New
York State Additional Real Estate Transfer Tax (the "Mansion Tax")
Type of Property Affected
Tax Rate
Property that is
or may be used as a 1, 2 or 3 family house, individual
residential condominium unit or individual residential cooperative
apartment where the purchase price is $1,000,000 or more
........................................................................... 1%
of gross consideration
IV.
Mortgage Recording Tax in New York City
Type of Mortgage Affected
Tax Rate
Any mortgage
securing less than $500,000
.......................................................................................................
2.00% of Mortgage Amount
Mortgage of a 1,
2 or 3 family dwelling or individual residential
condominium unit securing $500,000 or more
...........................................................................................
2.125% of Mortgage Amount
All other mortgages securing $500,000 or more
..........................................................................................
2.75% of Mortgage Amount
Note 1. Components of Mortgage Recording Tax. The mortgage
recording tax in New York City consists of a basic mortgage recording tax of
$.50 per $100 (Tax Law §253); a special additional tax of $.25 per $100 (Tax
Law §253.1-a.(a)); and an additional tax of $.25 per $100 (Tax Law
§253.2.(a)); plus (a) $1.00 per $100 on mortgages securing less than $500,000,
(b) $1.125 per $100 on mortgages of 1, 2 or 3 family dwellings and individual
condominium units securing $500,000 or more, and (c) $1.75 per $100 on all
other mortgages securing $500,000 or more (Tax Law §253-a, Adm. Code of City
of New York, §11-2601, as amended, effective August 1, 1990).
Note 2. Mortgage Recording Tax Payable by
Mortgage Lender. Where the premises are improved or are to be
improved by a structure containing not more than six residential dwelling
units having their own separate cooking facilities, the special additional
mortgage recording tax of $.25 per $100 is to be paid by the mortgage lender,
unless the mortgage lender is a natural person, in which case the mortgage is
exempt from this portion of the tax. (Tax Law §253.1-a.(a))
Note 3. Mortgages on Property Improved by One
or Two Family Dwelling. If the mortgage is on a property principally
improved or to be improved by a one or two family residence or dwelling, the
first $10,000 of the mortgage obligation is exempt from the additional
mortgage recording tax of $.25 per $100, with a maximum exemption of $25 (Tax
Law §253.2.(a)).
Note 4. General. The information set
forth above concerns the rates of tax only for properties located in New York
City and is believed to be accurate as of August 1, 2002. Consult your
attorney, however, for up-to-date information, and for information with
respect to exemptions, vacant land, treatment of existing liens, leases and
leasehold transfers and surrenders, transfers of controlling interests,
foreclosures or deeds in lieu, and real estate investment trusts.
Note 5.
Links. The form of NYS Real Estate Transfer Tax Return is available
at http://www.tax.state.ny.us/pdf/1996/et/tp584_1096.pdf. The form of
NYC Real Property Transfer Tax Return is available at http://www.ci.nyc.ny.us/html/dof/pdf/99pdf/nycrpt1.pdf.
Questions
regarding this advisory may be directed to
Macculloch M. Irving (irving@clm.com)
or Melinda Poon (poon@clm.com) of our New York Office (212-732-3200).
Carter, Ledyard & Milburn uses Client Advisories to
inform clients and other interested parties
of noteworthy issues, decisions and legislation which may affect them or their
businesses. A Client Advisory does not constitute legal advice or an
opinion. © 2002 Carter, Ledyard & Milburn.
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