- Flip tax
A flip tax is a fee paid by a seller or buyer on a housing
co-op transaction typically inNew York City . It is a transfer fee payable upon the sale of an apartment to the co-op. They are thus not taxes, in the sense that they are not paid to governments.Flip taxes are considered a method to help raise overhead expenses for co-ops without raising the maintenance fees or assessing flat charge to all residences. Charging the fee to those who are leaving the building seems to be the most politically feasible.
Types of flip taxes:
# A flat fee
# A dollar amount based on shares allocated to the subject apartment
# A percentage based on the sales price
# A percentage based on the net profit of the sale
# A fee based on the duriation the seller has owned the apartments (shorter time periods of ownership typically bring higher fees)History
Legal grounds
The imposition of flip taxes in New York City has been supported in the courts. The
New York State Legislature in July 1986 acted on a proposal from the Council of New York Cooperatives and Condominiums and defined in what way co-ops could legally impose these fees, specifically the law allows such a tax if it is sanctioned in the co-ops proprietary lease, and if not as long as the lease is amended with more than two thirds of shareholders approving.External links
* [http://www.fliptax.com Understanding flip taxes]
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