Masion Tax
Started by hkinterested
over 15 years ago
Posts: 60
Member since: Nov 2007
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i have a similar question. could a buyer who is willing to pay 1.020mm for a property, which therefore incur a 10,200 mansion tax, instead offer to pay 990,000, but then pay the broker's out of pocket to make everyone whole - i.e. at 1.02 the seller would net 958,800 after broker fees, so if the agreed at 990k, the seller would pay 31,200 of the fees, and the buyer would pay 30,000 directly to the brokers - so all parties would receive the same, but the buyer would save the 10,200 mansion tax?
The mansion tax could be avoided at a 999,999 purchase price when the seller pays for the transfer tax. If the buyer is paying the transfer tax (1.825% of the purchase price) then the price can not exceed approx. 982k. When calculating the mansion in situations the buyer is paying the transfer tax, it gets added to the purchase price. Hope that made sense.
printer - not so sure about the legalities of that although I know its been done.
sunny.hong@bankofamerica.com
i think when its slightly over 1mm like your 1.020mm; you basically sell the 'furniture' and other 'things' separately to make them whole and to not break the 1mm barrier, or so i've heard at least.
Shong - have you seen or participated in transactions where the buyer paid 999,999 and seller paid transfer taxes? I want to make sure that no mansion tax is incurred.
I had a situation where the price was 990k and the buyer was paying transfer taxes so they wouldve had to pay for mansion tax. They negotiated the price down to 982k and was able to avoid mansion tax. So when the price is 999k and the seller is paying the transfer tax then you shouldnt be paying mansion tax. sunny.hong@bankofamerica.com
how is mansion tax calculated? is it a % over 1M? is it based on sales price or are there other factors? reading above it sounds like you're pay tax on tax? (transfer tax is included in the amount that you calculate mansion tax???)
Mansion tax is 1% of the purchase at or above 1M. Yes, if the buyer is paying transfer taxes then I guess youre paying taxes on taxes.