When Selling a home in New York, it is very important to know what you will be walking away from the closing table with, in order to have a grasp on what you can afford in your new home. Along with paying off your existing mortgage, paying broker and attorney fees, which are the usual calcuations, there are recording fees and State taxes that must be paid and certain taxes needed to be paid if there is a gain or it is an Estate property.
CLOSING COSTS - Fees and Transfer Taxes when selling a home in New York include:
NY CITY TRANSFER TAX:
- If the consideration is $500,000 or less, the rate is 1% of the consideration.
- If the consideration is more than $500,000 the rate is 1.425%.
NY STATE TRANSFER TAX:
You can expect to pay $4.00 on every $1,000 of the Sale price of the property.
CAPITAL GAINS TAXES- To calculate Capital Gains Tax, you subtract the original purchase price from the sale price. If there is one (1) owner on the Deed there is an exemption of $250,000, for two (2) owners on the Deed the exemption is $500,000. For example if the purchase price of a home was $30,000 and the sale price is $500,000, the gain would be $470,000. One owner on a Deed would have to pay taxes on $470,000 minus the $250,000 which would calcuate to $220,000 of a gain. The same transaction for two (2) owners would exempt them from paying any captial gains.
ESTATE TAX - Currently, when you inherit property, the cost basis when you go to sell, is the property’s market value at time of the person’s death. You pay capital gains tax on the difference between the market value and the selling price of the home. This stepped-up cost basis is set to expire in 2010, so heirs would have to pay capital gains tax on the difference between the original amount paid for the home and the selling price. President Obama has promised to extend the estate tax law, including this provision for a stepped up cost basis beyond 2010.
If you have any questions please feel free to contact me.
