In New York, a party must file a real property transfer form to effect a change in home ownership when a deed is filed. The deed is a separate document from the transfer form. Costs that must be paid include the real property transfer tax (RPTT) to the city and the New York state real estate transfer tax to the state. These taxes are different from one another, and both of them are mandatory.
There are also costs to file the real property transfer form with the city, record real estate documents such as the deed with the city, and record a mortgage with the city. The appropriate state form to file for a transfer of real property situated within the five boroughs of New York City is RP-5217-NYC. The five counties that make up the boroughs of NYC are: Bronx, Kings, New York, Queens and Richmond counties.
Basic Details Regarding the Deed
A real estate deed conveys ownership from a seller, or grantor, to a buyer, or grantee. The deed is usually drafted and signed at the time of closing the real estate transaction when the grantee pays the grantor. New York requires that a notary public be present when the deed is signed. After a party has filed the deed at the county clerk’s office in the county in which the property is situated, the grantee takes title to the property.
Reviewing the RP-5217-NYC Form
When filing the RP-5217-NYC form with the state, a filing fee of $125 is required for qualifying residential property, usually one-, two- and three-family homes and residential condominiums. A filing fee of $250 is required for all other properties. The first section of the form, which includes the county code and the date on which the deed was recorded, is to be completed by New York City staff.
The second section of the form includes information about the property, including the location of the property and the names of the grantee and grantor. This section also asks the size of the property conveyed in the deed. The property size can be found in the text of the deed or on the tax bill, but note that the tax bill may contain the size of the entire parcel when only part of the property is being transferred.
The third section of the form includes information about the sale of the property, including the full sale price and the date of the transfer. The fourth section includes information about the assessment of the tax on the transfer, including the building class and the borough, block and lot. The fifth section regards certifications by the grantee and grantor that the information on the form is correct. The form requires the signatures of the grantee and grantor, not their agents.
When Transfer Form Is Not Required
There are a number of situations where real property transfer forms do not need to be filed. The list of such transfers includes co-op transfers, rights-of-way and easements. Other situations that do not require the filing of a transfer form include lease agreements, mortgage refinancing, license agreements and tax sale certificates or option-to-buy arrangements.
Real Property Transfer Tax (RPTT)
A party must pay New York City’s Real Property Transfer Tax (RPTT) on sales, grants, assignments, transfers or surrenders of real property in New York City. They must also pay RPTT for a sale or transfer of at least 50 percent of ownership in a corporation, partnership, trust or other entity that owns or leases property and transfers of cooperative (co-op) housing stock shares. The New York City Department of Finance (DOF) may docket, or record, a judgment against both the grantor and grantee. After the DOF has docketed the judgment, it can enforce it.
NYC’s RPTT Tax Rate
The tax rate and the amount of tax due depends on the type of sale or transfer of property. The tax is typically paid as part of the closing costs at the sale or transfer of the property. For residential #1 and #2 type transfers, if the value of a property is $500,000 or less, the rate is 1 percent of the sale price. If the value of a property is over $500,000, the rate is 1.425 percent of the price.
A residential #1 type transfer is a transfer of an economic interest in a one- two- or three-family house, an individual residential condominium unit, or an individual cooperative apartment. A residential #2 type transfer is a grant, assignment or surrender of, or the transfer of an economic interest in a leasehold interest in a one-, two- or three-family house or an individual dwelling unit in a home of more than three families living independently of each other. For all other types of transfers, if the value is $500,000 or less, the rate is 1.425 percent of the price. If the value is over $500,000, the rate is 2.625 percent.
State Real Estate Transfer Tax
New York State Tax Law requires the payment of a real estate transfer tax when the consideration, or price, of the conveyance is over $500. The tax is computed at a rate of $2 for each $500 or fractional part thereof. There is an additional tax of 1 percent of the sales price, or a mansion tax, for residences when consideration is $1 million or more.
There is also a tax of $1.25 for each $500 or fractional part thereof when the consideration for the entire conveyance of residential real property is within New York City and is $3 million or more. This is the additional base tax. Further, there is a supplemental tax of the conveyance of real property when the consideration is $2 million or more. The tax rate is an incremental rate between 0.25 percent and 2.9 percent, based on the purchase price.
The seller, or grantor, is generally required to pay the base tax and additional base tax. The exception is if there is a contract between the buyer, or grantee, and the grantor that states otherwise. If the grantor does not pay the tax or is exempt from the tax, the grantee must pay the tax. When there is a conveyance of residential real property, if the grantee pays the transfer tax because of the contract, the amount of tax is excluded from the calculation subject to tax.
When the Grantor Fails to Pay Transfer Tax
When the grantee is required to pay the transfer tax because the grantor failed to pay it, the grantee and grantor are jointly and severally liable for the tax. When there is a failure to pay the tax, the grantee has a cause of action against the grantor for recovery of payment. The grantee must pay the mansion tax, or additional tax, and the supplemental tax. If the grantee doesn’t pay the tax or is exempt, the grantor must pay the tax. When the grantor must pay the tax because the grantee failed to pay it, the tax becomes the joint and several liability of the grantor and grantee.
New York City Tax Form
The appropriate form to file for a completed real estate transfer tax return for conveyances of property within New York City is TP-584-NYC. This form asks for the names and addresses of the grantor and grantee, the type of property being conveyed, conditions of the conveyance, the computation of the tax due and the signatures of the grantor and grantee.
If either party has not signed the return, the party who did not sign it may have to pay penalties as a non-filer. If the deed or document is not being recorded, the parties should file TP-584-NYC and pay any tax due directly to the New York State Tax Department. The payment should come no later than the 15th day after the delivery of the document.
NYC System for Property Documents
New York City’s system to record property-related documents is the Automated City Register Information System (ACRIS). ACRIS offers online access to property documents dating back to 1966. If a return is not filed at the time of recording of a deed or the deed has not yet been recorded, a party can file a paper return in any Office of the City Register, which records and maintains property records for property in all the boroughs except Staten Island – the Richmond County Clerk’s office maintains records for properties on Staten Island.
Steps for E-recording
A party may e-record the tax documents for the property. The first step is to prepare the documents and create the tax forms. The party must also create a cover page and scan the document into a PDF.
They should then upload the documents and review them. After doing this, they should submit the documents to the Office of the City Register through ACRIS or the Richmond County Clerk’s office for Staten Island. Next they should pay any taxes or fees by eCheck or credit cards. An ePayment cannot be split among multiple checking accounts.
Real Estate Document Recording Fees
The fee for recording real estate documents with ACRIS is $32, plus $5 per page and $5 for the cover page. The minimum price for two pages is $42, which is for the set, the cover page and one document page. A two-sided page counts as two pages.
The fee to record documents relating to the satisfaction of a consolidated mortgage is the total recording charge minus the $5 per page charge. This sum must be multiplied by the number of mortgages in the consolidated mortgage, and then the payor should add the $5 per page to the total. For example, a person recording a two-page satisfaction of mortgage document would pay the recording fee, minus the $5 per page charge for a total of $32. If the document represents a consolidation of two mortgages, the charge would be $64 ($32 x 2, or the recording fee multiplied by the number of mortgages) plus $10 for the two pages, for a total of $74.
A spreader agreement is treated as a separate mortgage. A spreader agreement spreads the reach of a mortgage to other properties, and sometimes also to other borrowers or lenders. Traditionally, in New York, parties have used spreading agreements rather than executing new mortgages to avoid paying mortgage recording fees.
Mortgage Recording Taxes
A mortgage recording tax must be paid on mortgages recorded on property in the five boroughs of NYC. The Office of the City Register collects this information for properties in Manhattan, Bronx, Brooklyn and Queens with ACRIS. The Richmond County Clerk collects this information in person for properties on Staten Island.
Paying the city and state transfer taxes does not satisfy paying off the mortgage. The new property owner must pay the mortgage to fully own the property. After the property mortgage has been paid in full, the lending bank or mortgage company provides the property owner with a document called a satisfaction of mortgage.
Notifying the DOF of Mortgage Payout
At this time, the lender is required to notify the NYC DOF that the mortgage has been satisfied. This allows the DOF to update its records as to ownership of the property. If the mortgage lender has also been paying city property taxes for the owner, DOF will begin billing the owner for the taxes.
It will start billing the owner upon the mortgage payoff date. The owner will also receive a property tax bill called a statement of account. If a property has an assessed value of $250,000 or less, it will receive property tax bills quarterly. A property with an assessed value of over $250,000 receives property tax bills semi-annually, or twice a year.
- New York City Department of Finance: Recording Property-Related Documents
- New York State Department of Taxation and Finance: Real Property Transfer Forms
- New York City Department of Finance: ACRIS
- New York City Department of Finance: Real Property Transfer Tax (RPTT)
- State of New York, Office of Real Property Services: RP-5217NYC, Real Property Transfer Report Instructions
- New York State Department of Taxation and Finance: Real Estate Transfer Tax
- NYC 311: Property Deed or Record
- New York City Department of Finance: Mortgage Recording Tax
- New York State Department of Taxation and Finance: TP-584-NYC-I
- Drafting a deed and correctly filling out the NYC-RPT form may require the assistance of an experienced real estate attorney.
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.