4% Flip Tax

That's on the high side (1.5-3% is more common) but would not assume that by itself it means financial trouble. I recently looked at a coop with a 2% flip tax that had healthy reserves, no underlying mortgage and low maintenance as a result. A charge this high would certainly be a significant deterrent to quick resales, but if the finances are otherwise in good order would doubt it is a dealbreaker for anyone looking for a longterm home.

It doesn't necessarily mean the co-op is in trouble - you'll have to review financials and read minutes to determine that for sure - but it certainly makes units there less marketable, which is a red flag and should warrant a discount relative to comparable units. Maintenance is also on the higher side for a classic 6, but not absurdly high. A 4% flip is well above market for NYC co-ops that are not affordable housing conversions, which often have 5% flip taxes (or higher).

Dan Gotlieb
Digs Realty Group
https://digsrealtynyc.com/

Thank you for that information. It seems that, apples to apples, co-ops are already less marketable than condos and should be subject to a discount accordingly. The high flip tax is a double whammy.

We were in a conversion where I used to live in the early 80's. It was deemed 10% which did effect the flip and move tenants. Then we were told by our board that a court ruled against it and some wanted their money back. I don't know the details of that ruling, jut what I remember at that meeting. Then I see it's back and expected to be paid by the buyer. In any market, why put up one more road block in order to quell the selling of your unit? As a buyer, to get hit with that and a mansion tax is really pushing it.

That's a bit higher than the average flip tax in NYC according to a recent Hauseit study:

https://www.hauseit.com/flip-tax-nyc/

My personal guess? Probably around 1.5% is the norm