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Understanding New York Real Estate Transfer Tax

Real estate transfer tax is levied on the transfer of the real estate. In New York State, this tax is administered by the New York State Department of Taxation and Finance. It applies to all real estate transfers, including residential, commercial, and industrial property. The amount of transfer tax due depends on the value of the property.

This article will provide a comprehensive overview of what is New York State real estate transfer tax and how it works.

What is New York State Real Estate Transfer Tax?

Real estate transfer tax is a tax imposed on the transfer of the real estate. In New York State, it is imposed by the New York State Department of Taxation and Finance. The amount of transfer tax due depends on the value of the property. The funds collected are used to support local government services and infrastructure.

Who Pays the Tax

The buyer and seller are both responsible for paying the transfer tax. The buyer is responsible for paying most of the tax, usually between 1.25% and 2.625% of the property’s value. The seller is responsible for the remaining amount, usually between 0.25% and 1.25%.

How is the Transfer Tax Calculated in New York?

The amount of transfer tax due depends on the value of the property. It is calculated as follows:

Value of Property\tTransfer Tax % Rate
$0 - $500,000\t1.25%
$500,001 - $1,000,000\t1.925%
$1,000,001 - $2,000,000\t2.625%

New York Transfer Tax Exemptions

Certain property transfers are exempt from the transfer tax in New York State. These include transfers between spouses, from parents to children, from grandparents to grandchildren, and between government entities.

Ways to Offset the Cost of the NYC Transfer Tax

The transfer tax can be a high cost for buyers and sellers. In some cases, sellers may be able to negotiate with the buyer to offset or reduce the cost of the transfer tax. This can be done by including the transfer tax cost in the purchase price of the property, offering to pay a portion of the cost, or offering other incentives such as closing cost assistance.

New York State Real Estate Transfer Tax

Real estate transfer tax is a tax imposed by the New York State Department of Taxation and Finance on the transfer of the real estate. The amount of transfer tax due depends on the property's value and is paid by both the buyer and seller. Certain property transfers are exempt from the transfer tax in New York State, and there are ways to offset the transfer tax cost, including it in the purchase price, offering to pay a portion of the cost, or offering other incentives.

Before investing in NY, it is important to understand all the taxes you will need to pay, such as capital gains tax. To learn more about these taxes, you can check out our guide on real estate capital gains tax.

George is the visionary behind NY Real Estate Trend. With over 20 years of experience in the real estate industry, he has a deep understanding of the New York market and a passion for helping others navigate it.
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