What to Expect When Buying and Selling Property in New York
When buying or selling property in New York, there are no additional taxes applied to foreign buyers and sellers that are not imposed upon U.S. citizens. The only exception to this rule is FIRPTA tax, which is a federal tax imposed upon most foreign property sellers regardless of the state where the property is sold. This is not to say, however, that there are not many fees and other costs associated with buying and selling property in New York. To that end, here is a look at some of the extra expenses you can expect to encounter.
Buying and Selling Condominiums and Townhouses
When selling a condominium or a townhouse, you can expect to encounter the following expenses:
Application/Waiver Fee: $500 – $1,000- Pick-Up Fee for Mortgage Pay-Off: $175 – $250
- Move-Out Deposit (refundable): $500 – $1,000
- Move-Out Fee (non-refundable): $250 – $1,000
- NYC Real Property Transfer Tax: 1 percent of sales price on transactions of $500,000 or less, 1.425 percent of sales price on those that are greater than $500,000
- New York Transfer tax: 0.4 percent of the sales price
- NYS Estimated Capital Gains Tax: 6.25 percent of the estimated gain
- Transfer Tax Filing Fee: $75
If two or more un-attached units are also sold at the same time to the same buyer, a Commercial/Bulk Sales Rate also applies. This is 1.425 percent of the sales price if it is $500,000 or less or 2.625 percent if the sale price is greater than $500,000.
When purchasing a condominium or townhome, you can expect to encounter the following additional expenses:
- Title Insurance – Owner’s Policy: Approximately $4 per $1,000 of insurance in addition to various search and recording fees totaling an additional $1,000
- Title Insurance – Mortgage: Variable depending upon the loan amount
- New York State Mortgage Recording Tax: 1.8 percent if obtaining a mortgage that is less than $500,000, 1.925 percent if obtaining a mortgage that is greater than $500,000
- Title Closer Gratuity: $250
- Bank Attorney Fee: $700 – $950
- Move-In Deposit (refundable): $500 – $1,000
- Move-In Fee (non-refundable): $250 – $1,000
- Purchase Application Fee: $500 – $1,000
- Mansion Tax: 1 percent of the purchase price if $1,000,000 or more
Buying and Selling Cooperatives
When selling a cooperative in NYC, you can expect the following expenses:
Stock Transfer Tax: $0.05 per share- Transfer Agent Fee: $500 – $700
- Move-Out Deposit (refundable): $500 – $1,000
- Move-Out Fee (non-refundable): $250 – $1,000
- NYC Real Estate Property Transfer Tax: 1 percent of the sales price if $500,000 or less, 1.425 percent of sales price if greater than $500,000
- NYS Transfer Tax: 0.4 percent of the sales price
- NYS Estimated Capital Gains Tax: 8;97 percent of the estimated gain
- Transfer Tax Filing Fee: $100
- Payoff Bank Attorney Fee: $375 – $500
- UCC-3 Filing Fee: $75 – $125
If two or ore unattached units are sold simultaneously to the same buyer, you must also pay a Commercial/Bulk Sales Rate of 1.425 percent if the sales price is $500,000 or less or 2.625 percent if the sales price is more than $500,000.
When buying a cooperative in NYC, you can expect the following fees:
- Cooperative Application Fee: $500 – $1,000
- Judgment and Lien Search: $250 – $350
- Recognition Agreement Fee: $150 – $250
- Bank Attorney Fee: $700 – $950
- UCC-1 Filing Fee: $75 – $125
- Move-in Deposit (refundable): $500 – $1,000
- Move-in Fee (non-refundable): $250 – $1,000
- Purchase Application Fee: $500 – $1,000
- Mansion Tax: 1 percent of purchase price if $1,000,000 or more
- Sponsor’s NYC and NYS Transfer Tax: Based upon the grossed-up price
- Working Capital Fund Contribution: 1 to 2 months of Maintenance
It is important to note that other expenses may also be included in these transactions, such as attorney fees or other costs for hiring professionals to assist with the process. Being aware of these extra costs before you make a purchase will help you to better determine your budget as you search for the property investment that is right for you.