is mansion tax imposed on the flip tax paid by buyer?

I'm no lawyer but generally you don't pay tax on a tax.

But why, in this market, is the buyer paying the flip tax? It's a matter of negotiability but they're generally paid by the seller.

ali r.
{downtown broker}

Well, sometime buyers pay tax on tax. It happens with new construction when buyer agree in the contract to pay seller’s closing cost. ( Tradition that came to all of us from Staten Island)
Let’s say purchase price is $400K. Seller’s part of closing are $1600 (NYC RE Tax) and $4000 (NYS RE Tax) which comes up to $5,600
In this case $5,600K gets add to the Purchase Price making taxable base for the purchaser $405,600.

Please realize that Co-op Flip Tax even though called “Tax” is really a FEE that is due at the closing and goes to the building reserve fund. I don’t think it’s a part of purchase price, unless you decided to finance it, so you don’t pay a lump sum out of your packet. Just double check with your attorney.

Each co-op has its own rules how to calculate and who pays it. In some buildings they assign "flip tax" to be paid by the buyer. But it’s really a matter of negotiability (especially in a buyer’s market)

elena
(broker)