What is real estate transfer tax and why do I need to fill out a TP 584?

Rent is so expensive in New York, so you may find yourself interested in buying a home.  With real estate comes real estate transfer tax, and the TP 584 form.

What is real estate transfer tax? It’s a state and sometimes city tax paid generally by the seller when there is a transfer of property. The money goes into the general fund.

Real Estate Transfer Tax Example: (the exact amount will vary based on your county) If you are buying a $500,000 home in New York City, you would be subject to two (2) transfer taxes; one for NY State ($2,000.00) and one for NY City ($5,000.00).While that fee may be insignificant compared to the purchase price, it is always wise to minimize costs as much as possible, and that includes not overpaying in taxes.

**** For the real estate transfer,have to fill out a TP 584 form.

The TP 584 (Transfer of Real Property form) is used to report real estate transfers and real estate transfertaxes which are payable at settlement. This New York real property transfer tax form is available from your realtor, a title company or can be downloaded from the New York State Department of Taxation & Finance website. You can also call 516-536 5222 if you need assistance in filling out the real property transfer tax forms for a New York realty transaction.

The information on this form needs to be provided by both the buyer and seller.  Each party will receive a copy of this New York realty paperwork along with their realtor fee statement.

The real estate transfer tax calculator can help you estimate how much real estate tax is owed based on the type of real property (single-family, condo unit, etc.) and its current value.

In New York State there are two types of real estate transfer taxes; sales taxes and documentary stamps. The amount due for realty transfers is payable at settlement by both buyer and seller.

If this seems complicated, that’s because it is!  This is why you should always work with top-quality real estate professionals who will ensure the biggest investment of your life is properly taken care of from a legal perspective.   Regardless of whether you are buying real estate or selling real estate, there is a real estate attorney and title company who can help.

What is real estate transfer tax?

It’s an excise tax, based on the sale price of your real property. If you’re selling realty in New York State, this includes any land, improvements, and personal property associated with the realty; such as builder-installed window treatments. The amount due for realty transfer taxes is payable at settlement usually by the seller. The two parties liable to pay real estate transfer taxes are a buyer (or purchaser) and the seller (seller) In some cases, both may be liable for real estate transfer taxes.

Example: Bill wants to purchase realty from Sally for $150,000. They agree that he’ll pay her $10,000 earnest money at settlement; $5,000 to her attorney and $2,500 each for two realtors involved in the process. The grantee of the real property is usually represented by an attorney and covered by a title insurance policy issued by a licensed title company.

Title insurance is incredibly important as it will prevent any 3rd parties from becoming involved in the sale and /or real property transaction that may have an interest in the property. Title insurance secures title to real property so that, once you take ownership of the real estate, you are assured that no one else can come along afterward and claim ownership or make a claim against your home.

Purchasing real estate is a very large investment and it’s important to protect yourself by buying title insurance. There are also many other factors involved on real estate transfer tax not discussed here; these include:

– property tax adjustments

– capital gains taxes on sale of realty (if applicable)

– general state sales & use tax associated with closing real estate transactions

For more information about real estate transfer tax, visit MacGregor Abstract.