A flip tax is a transfer fee charged by a NYC co-op or condo when a unit is sold, paid to the building itself to fund reserves, capital improvements, or operating budgets. It is set by the board or written into the proprietary lease and by-laws, and amending it typically requires a two-thirds shareholder vote.
NYC flip taxes take one of four common structures. A flat fee charges a set dollar amount per sale, often $5,000 to $50,000. A percentage of sale price charges 1% to 3% of the gross sale, the most common structure. A per-share flip tax charges a dollar amount multiplied by the number of shares allocated to the unit. A percentage of profit charges a portion of the seller’s gain, usually 10% to 20%, and is the hardest to administer. The seller usually pays, though some buildings split the cost or assign it to the buyer. Flip taxes are not deductible as a tax expense but can be added to the cost basis of the unit.
Wondering if your building’s flip tax is doing enough for the reserve fund? MD Squared helps boards evaluate flip tax structures, model long-term revenue, and align transfer fees with capital planning goals. Our Condo-Coop Property Management service includes transparent financial reporting and detailed reserve analysis. Book a financial review with our team and find out where your building stands.
