Q&A: One Name or Two?

Q I’d like to ask about the transfer tax in co-ops. I have been living in a co-op unit with my brother for 11 years. It is currently under both of our names, but now I want to change it to my name only. How does the transfer tax figure in? What does the law say about transfer tax? Do I still have to pay the transfer taxes?

—- Curious Cooperator

A “New York City and New York State each generally impose a real property transfer tax on transfers of interests in real estate, including transfers of cooperative apartments,” says attorney Eliot H. Zuckerman, a partner with the law firm of Hartman & Craven LLP in Manhattan. “If, as it appears from the question, record ownership of the stock is in the individual names of both siblings, then both the state and city taxes would apply to a transfer of the interest of one sibling to the other.

“The amount of transfer tax payable depends on the amount or value of the consideration paid. Consideration includes (among other items) cash, promissory notes, and property conveyed, and relief from indebtedness (if the transferring sibling is being relieved of the obligation to re-pay a cooperative apartment loan). The New York City rate for the transfer of a residential cooperative unit is 1.0% where the consideration is $500,000 or less, and 1.425% where the consideration is more than $500,000. The New York state rate, regardless of the amount of consideration, is 0.4%—based on the consideration being rounded up to the nearest $500, if not already divisible by that amount.

“If no consideration is being paid (including no relief of loan indebtedness), then no transfer tax is payable, though the requisite transfer tax forms still need to be completed and filed together with the city’s filing fee, which is currently $50. The transfer tax forms and payment(s) are due within thirty days after the date of closing.”

And according to Harrin K. Platzner, chief operating officer of Platzner International Group, Ltd., a real estate management company based in New Rochelle, N.Y., “You should also be aware that most cooperative offering plans allow for the transfer of a unit from an immediate family member, i.e. father or mother to son or daughter, or vice versa, without the need for board approval or the payment of the cooperative flip tax.” n

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