Before you sell your co-op apartment, it’s important to know the answer to this question – What are the taxes on the sale of a NYC co-op? There are four taxes all co-op owners should know about.
1. State Transfer Tax
The state takes a slice of every real estate transaction made in NYC. The tax rates are simple and applied to all property types, including co-ops. There is a 0.4% tax for properties that have sold for less than $3 million and a 0.65% tax for properties selling for $3 million or more.
2. City Transfer Tax
The city government has different tiers and tax rates. They apply a minimum of 1% tax rate for any properties selling between $25,000 and $500,000 and about 1.425% tax on all properties selling above the $500,000 mark.
3. Flip Tax
While flip Tax is not exclusive to co-ops, it’s much more common in co-op apartments compared to condos in NYC and doesn’t exist for other property types. The average is around 1% to 2% of the sale price, but it can be much higher in some buildings. This is something your New York City broker will tell you about and encourage you to consider as a factor when you are buying into the building.
4. Capital Gains Tax
When you sell a co-op and earn a profit, you will also need to pay a capital gains tax. This is levied by both the federal government and the state government. The federal tax rate is based on your income and can be 0%, 15%, or 20%. The state capital gains tax is around 10.9% max), and the city also imposes a max tax rate of 3.876%.
