Title insurance is often one of the more perplexing aspects of buyer closing costs in NYC. It can cost thousands of dollars, and many buyers don’t fully understand what it is and why it’s necessary. So, let’s delve into what exactly title insurance is and why it’s crucial when purchasing property.

As you prepare to make your first property purchase in New York City, the excitement and apprehension are certainly real. Navigating the financial maze of property acquisition can be daunting. You might have an idea about certain costs that you’ll encounter on closing day such as the purchase price, legal fees, and title costs. But suddenly, you’re left puzzled by a surprisingly high title bill. The primary culprit behind this inflated cost is likely the mortgage recording tax.

What Is The NYS And NYC Transfer Tax?

In New York City, a Real Property Transfer Tax (RPTT) is levied on all transfers of real property and co-op shares exceeding $25,000. It’s also applicable when there’s a transfer of over 50% of the ownership in a corporation that owns property. In addition to this, New York State imposes its own transfer tax on all property transfers above $500. Other states and cities have their unique rules, differing from those of New York City and New York State. The cumulative effect of all transfer taxes leads to higher closing costs for most sellers. The New York City transfer tax is a significant revenue source for the city, with an expected generation of $1.5 billion in 2015 alone.

At SPiRALNY, we understand that our distinguished clientele, in their quest to navigate the luxury real estate landscape of New York City, may already be familiar with the myriad taxes associated with buying, owning, and selling real estate. They may be aware of the mansion tax, transfer taxes, mortgage recording tax, and property taxes. However, one levy that often surprises many, and particularly co-op buyers, is the ‘flip tax.’ We believe it’s vital for buyers to understand flip taxes as they can considerably affect the financial dynamics of purchasing apartments in NYC.