Just when you thought there couldn't be another New York City Apartment closing cost, you find out about flip taxes. Flip tax is actually a misnomer because it's not actually a tax. It's a transfer fee paid to the building. So just like New York city and state charge sellers of 1.825% transfer tax for most transactions. Your building may also charge a flip tax. While we have been coming across more condos with flip taxes. The vast majority can be found in co-ops. Yoreevo took a sample and found out that about 90% of co-ops have one. Most of the time they're a simple 1 or 2 percent of the sale price, but they can also be a fixed amount. A fixed amount per share, a percentage of the gains, or really anything else the building can come up with. We've seen a few where the rate goes down the longer you own the apartment. Flip taxes are typically paid by the seller but it's all negotiable. There are some buildings often on the Upper East Side which actually require the buyer to pay them. If you ask us, that's pretty stupid, but again buildings can do whatever they want. If you ask boards with flip taxes, they'll say that they serve two main purposes: they discourage short-term ownership, and they provide a revenue source for the building. But think about that a bit more. If you only pay when you sell, who benefits from flip taxes? The people who never sell. Flip taxes are basically for shorter term owners to subsidize maintenance for longer term owners. Remember the money goes to the building. So when someone sells, the building collects that flip tax revenue, and maintenance can be that much lower. In fact, if you're planning on living in an apartment for a few decades, you might want to seek out a building with a big flip tax, because everyone who sells will effectively pay you. While New York City certainly doesn't need another closing cost, there's nothing wrong with flip taxes. My problem is that they're not usually disclosed until you make an offer or the deal sheet goes out. If you're considering an offer on a co-op, you should always ask whether the building has a flip tax beforehand. Now if you're facing a flip tax as a buyer or a seller, a good way to offset that is to work with Yoreevo. Our buyers receive a commission rebate for up to 2% of the purchase price and our sellers save 2-4% on brokerage commissions. On either side that'll usually at least offset any flip tax you might be facing. For more info, you can reach out to me at james@yoreevo.com, and I look forward to hearing from you