flip tax

dh and i are trying to decide about buying a place - a co-op/condo in queens
I see a lot of postings that say "no flip tax"...anyone know what that means??

Re: flip tax

A flip tax applies to co-ops. With a co-op, you are buying shares in the corporation that owns the building in which the co-op unit resides (rather than the unit, i.e., real property, itself).

So when ownership of the unit changes, the shares of stock are transferred, and there is a fee to transfer the shares. That fee can be a flat fee, a percentage of the purchase price, or it could be calculated some other way (but I've always seen it as a flat fee or a percentage of the purchase price... usually 1%). It's not really a "tax" though -- so the name is a bit misleading. It's just a way for the co-op to collect some more revenue.

In this area, it's customary for seller to pay the flip tax out of the sale proceeds (although like anything else, that is negotiable, and the buyer could agree to pay it as part of the agreement).

So if the listing says "no flip tax" -- you know that when you sell the unit down the road, you won't have to pay a fee to transfer the shares.

Re: flip tax

thank you!!