« Last post by agentarmen on November 25, 2015, 08:21:41 PM »
I think to properly answer your question Steven is to address the fact that Flip tax is not iposed but rather voted in (and sometimes out) by shareholders of the coop that a seller is part of. The seller is typically responsible for payment of the flip tax unless otherwise negotiated. It is for the need/purpose of adding to the building’s reserve and in some cases to discourage early resales.
I am active in both Manhattan and in Jackson Heights, and I have to say that Flip taxes and structure are different across the board. 2-3% is not typical, but rather a number indicative of the number that most mortgage lenders find acceptable. But neither in Manhattan or Jackson Heights there is a rule of thumb or any commonality. Remember, flip tax is instituted by some coops on AS NEEDED basis.
Now, calculations of flip tax can varie.
1. Worth mentioning, many building have NO flip tax
2. Another type of calculation is based on percentage of gross sale
3. Percentage of GAIN made on the unit
4. Dollar amount per share
5. A flat transfer fee
6. Some flip taxes are lateral. They start at a higher number for a set number of years, then drop to a lower number or be reduced to zero.
I don’t want to rattle off my knowledge of which Jackson Heights buildings do or don’t have a flip tax and of what type, even as an example, because they may vote one in or out just as I am writing this, rendering my information inaccurate
My recommendation would be to study each building individually, and ultimately pick a corporation you feel comfortable and confident investing in. Flip tax is only one of many factors you must consider. I hope this helps.