A real estate flip tax in NYC is a private transfer tax levied by the individual co-op or condo buildings on sellers. The specific flip tax varies by building, and not all co-ops charge sellers a flip tax.
While condo buildings do not typically have a flip tax, it’s not unheard of for a condo to charge sellers a small flip tax or to ask buyers to make an initial capital contribution when purchasing. A buyer capital contribution is typically a few months’ worths of common charges, and this is designed to help maintain and building a condo’s reserve fund.
In addition to any private transfer tax levied by a building, all sellers in NYC are required to pay the NYC & NYS Transfer Taxes when selling. The combined transfer taxes for NYC & NYS are 1.4% for sales of $500k or less and 1.825% for sales above $500k.
Assuming a 2% flip tax, the combined NYC & NYS Transfer Taxes and flip taxes are 3.4% for sales of $500k or less and 3.825% for sales above $500k.