|The 2020 New York State Budget Bill includes increases to the New York State Transfer and Mansion taxes, which affect real property in New York City as well as any other city in New York State with populations of one million or more. In addition to the $2.00 per $500.00 of consideration (or fraction part thereof) of New York State Transfer Tax, the new law adds an addition $1.25 per $500.00 of consideration, (or fraction part thereof) on residential property (see note 1 below) where the consideration is three million dollars ($3,000,000.00) or more, or on the consideration on other property (not residential) of two million dollars or more ($2,000,000.00). This tax is paid by the seller and subject to the exemptions and conditions contained in the New York State Tax Law. |
Consideration Transfer tax Resid’l Transfer tax non-Resid’l
Under $2,000,000.00 $2 per $500 (.4%) $2 per$500 (.4%)
$2,000,000 to $3,000,000.00 $2 per $500 (.4%) $3.25 per $500 (.65%)$3,000,000.00 or more $3.25 per $500 (.65%) $3.25 per $500 (.65%)
The Bill also adds, in addition to the 1% tax on consideration of residential (only) real property, in excess of $1,000,000.00 (commonly known as the Mansion Tax) additional supplemental Mansion taxes. The supplement Mansion tax is on residential only property (see Note 2 below) located in New York City or a city in New York State with a population of one million or more. The supplemental Mansion tax increases based upon the amount of consideration. This tax is paid by the Buyer.
Consideration New York Mansion Tax
(incl Supplemental Mansion tax) $1,000,000.00 or less Not subject to tax $1,000,000.00, to 1,999,999.99 1%
$2,000,000.00 to 2,999,999.99 1.25%
$3,000,000.00 to 4,999,999.99 1.5%
$5,000,000.00 to $9,999,999.99 2.25%
$10,000,000.00 to $14,999,999.99 3.25%
$15,000,000.00 to $19,999,999.99 3.5%
$20,000,000.00 to $24,999,999.99 3.75%
$25,000,000.00 or more 3.9%
Note 1: Residential property, including an interest therein, is defined as a 1,2 or 3 family house, an individual residential condominium unit.
Note 2: Residential property, including an interest therein, is defined as property used in whole or part as a personal residence, and includes a 1,2 or 3 family house, an individual residential condominium unit or a cooperative apartment.
The New Transfer and Mansion tax rates take effect on July 1, 2019 for conveyances occurring on or after July 1, 2019. If you close after the effective date but can prove you entered into a binding contract as confirmed by independent evidence such as the recording of the contract, payment of the contract deposit or other facts and circumstances, determined by the Commissioner of Taxation and Finance the parties will be permitted to pay the current rates. If you enter into a contract today, but close, record and pay the transfer tax by June 30, 2019, you will also pay the current rates.
The new Transfer and Mansions taxes shall be paid in the same fashion as the current New York State Transfer and Mansion Taxes.
This bulletin is sent courtesy of CB Title Agency of NY, LLC and Stewart Title Insurance Company. This article is for informational purposes only and is not intended to provide legal advice, but rather to provide insight into legal developments and issues that may be useful to our clients and friends. In no circumstance is this article intended to be a full treatment of the above subject matter. Reader is advised to obtain additional information as noted.