ARE YOU SELLING OR BUYING A BRONX CO-OP? Learn About The Flip Tax & Its Affects On NYC Closing Costs

July 27, 2020

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In “ARE YOU SELLING OR BUYING A BRONX CO-OP? Learn About The Flip Tax & Its Affects On NYC Closing Costs,” we discuss what the flip tax is and how it can impact your sale or purchase of a co-op.
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TRANSCRIPT FOR VIDEO:
Thinking of selling or buying a co-op in NYC? Let’s talk about the flip tax. Welcome home. My name is Justin, your local Bronx real estate agent and if you’re a first time viewer interested in tips for the home selling process or home buying advice, please be sure to slam that subscribe button and the bell next to it so don’t miss anything. With that being said, the co-op flip tax is not actually a tax but rather a transfer fee charged by the corporation when a sale occurs in it’s community. A co-op board will mandate a flip tax on sales to generate revenue. Dolla dolla bills, y’all. The idea behind a flip tax is that it’s a less painful way to raise funds for the co-op as opposed to increasing maintenance fees or charging a special assessment to everyone in the complex. The amount of a flip tax will vary from co-op community to co-op community but we often see flip taxes in the 1% to 3% range. Side note, if you’re in an HDFC co-op, you flip taxes are often a lot, lot, lot higher. We’re talking about 30% to 50% of your profits higher. I’m sorry. Beyond the amount, co-op boards use different methods of calculating their flip taxes. Some charge a flat fee, others base their flip tax off the percentage of the final sales price per unit, while still other co-ops charge a flip tax that is a certain percentage of the seller’s profits. If you have any questions about the flip tax, be sure to leave them in the comments below. Also, be sure to slam that Like button if you like what you’re hearing so far. Now who has the illustrious honor of paying the flip tax and having their NYC closing costs increased? The seller of the shares of the co-op often pays the flip tax. However, sometimes these co-op fees are paid by the buyer, or they’re split between both parties. Your contract of sale will always detail who is responsible for paying the flip tax at your closing. If you want more information on how to sell an apartment or buy your Bronx co-op, including an overview of the co-op sales process and helpful tips, there is a free guide that you can download using the link in the comments and description. Lastly, be sure to slam that subscribe button, again if you haven’t done so already so you can keep getting the real on Bronx real estate. Thanks again and I’ll see you next time.