Who Pays Transfer Taxes at Closing? - Peter Zinkovetsky

BSPE Legal Marketing Podcast

From Avenue Law Firm – In this episode, we explore "Who Pays Transfer Taxes at Closing?" and break down the financial obligations involved in New York real estate transactions. Transfer taxes, including the New York State transfer tax and New York City’s Real Property Transfer Tax (RPTT), are significant components of closing costs for buyers and sellers. These taxes, based on the property’s sale price, can vary depending on whether the transaction involves residential or commercial property. Understanding these tax obligations is crucial to avoiding delays and ensuring compliance with state and local regulations.
We discuss the responsibilities of both buyers and sellers in paying transfer taxes, highlighting the mansion tax applicable to high-value properties and the supplemental taxes imposed on luxury real estate in New York City. In most cases, sellers cover the base transfer tax, but there are situations where buyers may need to pay, such as when the seller fails to meet their obligations or in transactions exceeding specific thresholds. Additionally, we address exemptions for certain entities, such as government agencies and diplomatic organizations, and explain the documentation required to claim these exemptions.
Filing transfer taxes in New York involves completing forms like TP-584 and TP-584-NYC and adhering to deadlines to avoid penalties. The filing process, especially in New York City through the Automated City Register Information System (ACRIS), requires accuracy and attention to detail. We cover the importance of disclosing ownership details for transactions involving limited liability companies (LLCs) and the potential legal liabilities, such as judgments and liens, for failing to comply with transfer tax obligations.
Whether you are a buyer, seller, or LLC involved in a property transfer, working with a New York real estate attorney can help ensure your transaction complies with state and local laws. Avenue Law Firm offers comprehensive legal support to guide you through transfer tax filings, manage exemptions, and handle closing processes smoothly. Contact Avenue Law Firm today at [phone] to schedule a consultation and make sure your real estate deal is managed with care.
Avenue Law Firm
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