Who Pays Transfer Taxes in New York?

Many states impose a tax on property sales and transfers at the time the deed is presented for recording. Some state laws allow for either the seller or buyer to pay this tax; however, in New York state the seller is required to pay transfer taxes.

Tips

  • In New York state, the seller of a property is required to pay the transfer taxes.

Exploring Property Transfers

Property transfers in New York are completed by warranty deeds. These deeds include the seller and buyer's names and addresses. Additionally, a deed provides a complete legal description of the property. The price paid for the property is listed on the deed as well. This price is referred to as the consideration, and the transfer tax amount is derived from it. Deeds are submitted to the county clerk to be filed on record. Recording a deed allows the information about the transfer to appear on the property title for future searches.

Tax Rates in New York

Transfer taxes in New York are assessed by the state and the county the property is located in. The statewide tax rate is $2 per $500 of the consideration for the property, which is a rate of 0.4 percent. In New York City, the tax is levied at a rate of 1 percent for residential properties valued at $25,000 or more and 1.425 percent on residential properties worth more than $500,000. County transfer taxes vary widely across New York. Most are based on a fraction or percentage of the consideration like the state's. These taxes are owed by the seller.

For considerations above $1 million an additional tax, known as the mansion tax, of 1 percent is imposed for home sales within New York City. The buyer generally pays this tax.

Assessing Tax Payments

The transfer tax is paid when the deed is presented to the recorder. Usually, the seller or the buyer do not participate in this part. The mortgage lender or title insurance company generally takes care of this portion. The seller pays the real estate broker, or other responsible party, the amount of the tax at the time the deed is signed. The money is set aside until the deed is ready to be recorded. New York does offer a number of exemptions from the transfer tax. Most of these exemptions do not apply to a typical property transfer. However, the county clerk can advise if an exemption will apply.

Other Important Considerations

A form must accompany deed transfers in New York at the time of recording. The form is known as the TP-584 form. It requires information about the seller, buyer, property and the sales price. Additional forms may be required if a mortgage loan is used to purchase the property, as a separate mortgage recording tax is assessed in New York. The forms are available through the county clerk.

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