Monday, October 26, 2020 / by Vanessa Saunders
By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
I hear a lot of odd reasons why people won’t use a Realtor to sell their home. I’ve never heard this one before. I was following up on a For Sale By Owner property recently, to see if they’d sold their house since I contacted them six months ago. The owner indignantly cited a “fact” he heard from his neighbor.
“I understand New York state has now started charging sellers 4% of their price to sell their home. And it goes straight to Cuomo,” he said. “I am not paying you 6% and Cuomo 4%. That’s ten percent of the value of my house!”
This is how urban myths start, how false rumors and misunderstood facts grow into Elvis sightings and conspiracy theories. Let me presume to explain.
First of all, no state taxes, fees or tolls go straight to Governor Cuomo. True, there are lots of taxes, fees and tolls that DO go to the state. As a matter of fact, if there were a contest for states that can find the most reasons to tax its citizens, New York would win a Golden Ticket. But an extra 4% real estate tax? Categorically, no.
What our FSBO’s neighbor may have heard about but misconstrued is the New York Transfer Tax. New York state defines the tax thusly: ‘New York State imposes a real estate transfer tax on conveyances of real property or interests therein when the consideration exceeds $500.” Transfer Tax is recognized as one of the many legitimate government fees imposed on real estate sellers.
The first New York transfer tax was enacted in 1959 and imposed on residents in New York City. Since then, the rate and scope of the tax has grown. In 1959, New York City real property sellers were subject to a 0.5% (one half of one percent) tax. Over time, our State Assembly has found it beneficial for all its citizens to now pay 0.4% (that's four tenths of one percent or $4 per thousand) tax for properties sold below $3,000,000 and 0.65% for those $3,000,000 and up, and is imposed upon all state residents.
Don’t look now, but I think I see Elvis standing over there. Near that UFO crash site.
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