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Is the NYC Transfer Tax a Progressive Tax for a SFR?
Is the New York City transfer tax a progressive tax? This is from the NYC website for a 'typical' SFR transfer (Link to NYC Website):
- If the value is $500,000 or less, the rate is 1% of the price.
- If the value is more than $500,000 the rate is 1.425%.
If the tax is not progressive then it seems like a seller would be better off selling a place for $499,999 than $500K, because the taxes incurred would be about $2,125 more (or $7,125 vs $4,999).
Thanks in advance for any input.
@Jonathan Makovsky I'm not an accountant, so this isn't tax advice. But I believe that the transfer tax is not progressive. So what you mention above is correct (although technically $500K would still only pay the 1%, above that pays 1.425%).
I think if you were in a situation where you (or someone you represent) was selling and the price came in right at this level, you would just have an open discussion with the buyer about the taxes (of course they'd be happy to pay less anyhow). I would imagine if this situation came up then the lawyers would already be on top of it (assuming you have a good one!), but I have a feeling that very few properties are closing at $501k. :)
- Matt
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Thanks so much @Matt Payne ! That is how I understood it as well.