What is a Flip Tax?

In New York City, housing has changed a lot over the last several decades. Today, approximately 75 percent of residential properties here are co-ops, not rentals or condos.

Co-ops aren’t like typical property purchases. When you purchase a unit, you’re actually buying shares in a corporation that owns the building. Instead of receiving a deed to a specific unit, you become a shareholder with the exclusive right to live in a particular apartment under a proprietary lease. That shift in structure also changes how the transaction works.

One cost you might run into is the flip tax. It’s a fee set by the co-op board and charged when a unit is sold. Sometimes the seller pays for it. Sometimes it’s shared or negotiated. It depends on what’s in your contract, and it’s often considered alongside other expenses when calculating NYC home seller’s closing costs.

If you’re thinking about buying a co-op, it’s important to know your rights and responsibilities in the transaction. Asking the right questions before buying a co-op in New York can help you make informed decisions and avoid unexpected issues. At Sishodia PLLC, our New York City real estate lawyers take the time to go over each part of the deal with you, including things like flip taxes. If you’ve got questions about co-op purchases or anything else tied to real estate in New York, we’re here to help. Contact us at (833) 616-4646 to schedule a consultation.

What is the Purpose of a Flip Tax?

As a corporate structure, a co-op is also more invested in long-term unit ownership and is more particular about who becomes a unit owner. Consequently, flip taxes also discourage buying and flipping units for quick profits.

When many buildings were converted from rental units to cooperative housing in the 80s, flip taxes became a good way to raise capital for expenses for the building without raising assessments for all the unit owners. 

New York City Real Estate Lawyers

Natalia A. Sishodia, Esq., LL.M.

Natalia A. Sishodia is a highly respected New York City attorney with extensive experience in real estate law, estate planning, taxation, and cross-border transactions. With fluency in English and Russian, and a client base spanning over a dozen countries, Ms. Sishodia is known for her individualized legal strategies, meticulous deal planning, and ability to deliver smooth, stress-free closings. She regularly advises on high-end real estate sales and purchases, conversions, deed transfers, 1031 exchanges, leasing, and tax-deferred investments.

Ms. Sishodia also provides estate planning, elder law, and international tax advice tailored to families and global investors. She is especially adept at estate planning for digital assets and cryptocurrency. Her community engagement includes pro bono legal service, advocacy for marginalized groups, and educational seminars. Recognized with awards such as the Avvo Client’s Choice and Outstanding Achievement in International Law, she continues to serve as trusted counsel for global clients investing in New York real estate.

Beatrice Raccanello, Esq., LL.M., MBA

Beatrice Raccanello is a trusted New York real estate attorney who focuses on real estate law and business advisory for clients purchasing or selling residential property across New York City. Her work spans contract negotiation, due diligence, and closings for co-ops, condos, and multi-family buildings. With multilingual fluency and international experience, Ms. Raccanello provides comprehensive legal support for both domestic and foreign clients navigating complex real estate transactions.

Ms. Raccanello also contributes to the firm’s business law services, advising on business formation, compliance, and contracts. Prior to joining the firm, she served as Director of Compliance at Temple Law School and held a leadership role with the ABA Lawyers Abroad committee. She holds a JD from Bocconi University, an LL.M. from Temple University, and an MBA in Strategic Management from Fox School of Business. Ms. Raccanello is admitted in New York and brings a global perspective to every case.

How Much are Flip Taxes in NYC?

Flip taxes are determined by each individual building and will vary significantly from building to building. While it is most common for flip taxes to run between one and three percent of the unit’s sale price, buildings can calculate them based on

• A percentage of the gross sales price of the unit
• A set number determined by the number of shares in the building
• A flat fee per transaction
• A percentage of the net profit from the sale

How Much is the Average Flip Tax in New York?

The average NYC co-op flat flip tax is 1% to 3.3% of the sale price. This fee is usually paid by a seller. The cost of flip tax varies from one building to the next. In rare cases, you might even find a condo with a New York City transfer tax.

NYC’s flip tax structure can include a percentage, flat fee, per-share amount, or a combination of these. In addition to the flip tax, all other closing costs for sellers include broker commissions and the NYC & NYS Transfer Taxes. 

Who Pays the NYC Co-op Flip Tax?

While flip taxes are traditionally paid by the seller, who inevitably pays them is typically a matter of the terms of the sale. Often, the flip tax will be negotiated between the seller and buyer as part of the terms of the contract, sometimes with the buyer and seller splitting the fee between them at closing. 

As with many negotiable real estate costs, who pays for the flip tax can vary with the market at any given time. When the market is a buyers’ market, and sales are slower, the seller will most often pay the flip tax. In a hot market, a flip tax may fall on the buyer as part of the terms of the sale. Anyone buying or selling a co-op in New York City should understand who is contractually obligated to pay the flip tax in the transaction.

Are Flip Taxes Good or Bad for Co-Op Owners?

Flip taxes help subsidize maintenance collected by all the unit owners in the building. From a capital perspective, this helps everyone in the building and helps ensure that investors don’t come in and flip units. The longer a resident stays in a building, the more benefit they get from others’ flip taxes. 

But a flip tax can significantly eat into a seller’s equity upon the sale of the unit. Furthermore, a flip tax is not really a “tax” but a fee to the co-op association, and it is not deductible like other taxes. 

Is a Flip Tax Tax-Deductible in New York?

Despite the name, a flip tax isn’t actually a tax. It’s a transfer fee commonly charged by co-op buildings in New York, especially in New York City, when a shareholder sells their unit. The building collects the fee to help fund reserves or cover other operating costs.

Because a flip tax is not a government-imposed tax, it’s not deductible as a tax item on your income tax return. The IRS treats it as a transaction cost, not a deductible expense. So, if you’re looking to lower your taxable income with a flip tax payment, that’s not an option.

However, that doesn’t mean it has no benefit come tax time. A flip tax can still reduce your capital gains. That’s because it’s treated as a cost of selling the property. Just like broker fees or legal costs, the flip tax can be subtracted from your gross sale proceeds when calculating capital gains.

While you can’t list the flip tax as a deduction on your tax return, you can include it in your total selling costs. This lowers your net gain and, in turn, your capital gains tax liability.

If you’re buying or selling a co-op, it’s important to account for the flip tax upfront. The amount varies by building and can be charged as a flat fee, percentage of the sale price, or based on shares owned. Understanding how it affects your total costs is crucial when calculating real estate transaction costs in New York.

Why Co-Ops Are Bad

When you purchase an apartment in a cooperative building, you won’t directly own your specific unit. Instead, your ownership will be in the form of shares in a co-op corporation that holds the building. These shares come with a proprietary lease, granting you the right to live in the unit. The number of shares you own within the corporation corresponds to the size of your apartment.

However, it is important to consider some potential drawbacks or challenges associated with co-op ownership:

• Stringent Approval Process: Co-op buyers often face a more thorough and demanding approval process, which may include interviews with the co-op board. This level of scrutiny can be time-consuming and may lead to rejection based on various factors.
• Foreign Buyer Limitations: Foreign buyers seeking to purchase co-ops may encounter additional hurdles due to their lack of sufficient U.S. credit history and the requirements for relationships with U.S. banks.
• High Down Payment Requirements: Co-op boards typically demand higher down payments, usually at least 20% of the purchase price. Some exclusive co-ops may even require higher amounts or prohibit buyers from obtaining loans.
• Restrictive Rules and Regulations: Co-op properties often come with their own set of rules, which can limit or prohibit certain activities, such as subletting or using the unit as a secondary residence.
• Complex Resale Process: Selling a co-op apartment can be more complicated due to the additional approval process involved. If a potential buyer is rejected by the co-op board, the seller may need to return to the market, potentially prolonging the sale.

While the question of whether co-ops are bad is frequently raised, it is crucial to consider the benefits of investing in a co-op. Here are some of the advantages of purchasing a co-op:

• Affordability: One of the most significant benefits of co-ops is their lower cost compared to condos. In places like New York, co-ops make up about 75 percent of the housing inventory, contributing to their overall affordability.
• Selective Screening Process: Co-op boards exercise a more rigorous approval process for potential buyers. While this may seem like a con, it also serves as an advantage by making the co-op community more selective. As a result, co-ops often boast higher owner-occupancy rates, which can provide a greater sense of stability and community in these living spaces.

Moreover, most co-ops have a flip tax, which is a fee paid at closing and can range from 1 to 3% of the sale price. This tax helps support the building’s finances. It’s important to note that the presence of a flip tax doesn’t inherently make co-ops bad. Instead, it is just one of the many factors that potential buyers need to consider when evaluating whether a co-op is the right choice for their circumstances.

Instead of focusing solely on potential disadvantages of co-ops, it is essential to carefully evaluate if co-ops are the best option for your circumstances. At Sishodia PLLC, our New York real estate lawyers can provide invaluable assistance in navigating the complexities of co-op transactions. We can guide you through the intricacies of co-op agreements and explain the legal implications involved. Schedule a consultation with us to explore your options.

Drawback	Description	Impact
Stringent Approval Process	Requires interviews and board approval.	Time-consuming and may lead to rejection.
Foreign Buyer Limitations	Limited U.S. credit history can cause issues.	Challenging for non-residents to qualify.
High Down Payment	Often requires at least 20%, sometimes more.	Can be a barrier for many buyers.
Restrictive Rules	Limits on subletting, renovations, or use.	Reduces flexibility for owners.
Complex Resale Process	Buyer must be approved by co-op board.	May delay or prevent successful sale.

Tax Benefits of Owning a Co-Op

Owning a co-op in New York City provides significant tax advantages that can help reduce the annual financial burden on homeowners.  One of the most significant benefits is the Cooperative and Condominium Tax Abatement, which directly decreases the property taxes owed by eligible co-op owners. This abatement is applicable to properties that serve as the primary residence of the owner and do not fall under certain disqualifying conditions such as ownership through a business entity or exceeding three residential units in one development.

The abatement amount varies depending on the assessed value of the residential units within the co-op. For example, units assessed at $50,000 or less receive a 28.1% reduction in property taxes, while those assessed above $60,001 qualify for a 17.5% reduction. This sliding scale of benefits ensures that property tax relief is extended in proportion to the value of the property. It’s essential to verify the most current rates with the New York City Department of Finance, as they are subject to change.

It’s important to note that individual co-op owners cannot apply directly for these benefits. Instead, the building’s management or board of directors must submit applications on behalf of the shareholders through the Cooperative Condominium Abatement Portal. The abatement requires annual renewal, which is handled by the co-op’s representatives to ensure continued tax savings. It’s important for co-op boards to stay diligent in managing this process, as failure to renew can result in a loss of the abatement.

For buildings without active management or an official board, owners may need to consult the New York City Department of Finance to explore alternative ways to secure the Cooperative and Condominium Tax Abatement. Compliance with the necessary requirements is crucial to maintaining these tax benefits. The abatement program serves as a key incentive, making co-op ownership in NYC more affordable for both current and prospective owners.

Consulting With an Experienced NYC Real Estate Attorney To Learn More About Flip Tax

Buying and selling real estate in New York City can seem overwhelming. There are a lot of details to manage. With the help of an experienced New York City real estate lawyer, you can have peace of mind knowing that your interests are being represented at all times.

At Sishodia PLLC, NYC real estate lawyer Natalia Sishodia and her knowledgeable team have handled complicated real estate transactions throughout NYC. Contact us at (833) 616-4646 or through our website contact form to schedule a consultation.

from Sishodia PLLC https://sishodia.com/what-is-a-flip-tax/

Do I Need to Pay Transfer Taxes When Transferring Title?

Transfer taxes are one of the biggest costs you’ll encounter when closing on real estate in New York, usually second only to the purchase price itself. If you’re planning to transfer property through a sale, a gift, or under a court order, it must be done with the proper legal paperwork. New York law has specific rules about how that’s handled, and it’s important to get it right.

There are many reasons you might need to transfer a title. Maybe it’s part of a family arrangement, a divorce, or a financial decision. Whatever the reason, you’ll want to be sure the transfer is legally solid and doesn’t come back to create problems later on.

At Sishodia PLLC, our Manhattan deed transfer lawyers help people handle deed transfers every day. We take the time to walk you through what needs to happen, explain how to handle the tax side of things, and help you avoid common missteps. If there’s a way to reduce or avoid the NYC transfer tax legally, we can help you explore it. Contact us today at (833) 616-4646 to schedule a consultation. We’re here to make sure your property transfer goes smoothly and that you’re fully informed every step of the way.

In New York, real property is transferred by means of a deed. The deed must meet a number of requirements to be effective, such as:

1. The deed must be in writing and contain operative language that is sufficient to transfer property ownership.
2. The seller must have the legal right to sell the property.
3. The deed must identify the buyer (grantee) and the seller (grantor), provide a legal description of the property, and identify the purchase price.
4. The deed must be signed by the person transferring the property and a public notary must notarize the seller’s signature. 

Once the deed is signed and completed, the conveyance process is essentially completed. The deed will need to be recorded in the county where the property is located to provide protection against other claims to ownership of the property. A real property transfer form is required for all property transfers where a deed is filed. A filing fee is also required.

There are many different kinds of deeds. Which kind you use will depend on what rights are being transferred and who is transferring the rights. Deeds must be carefully drafted, delivered, and recorded. Working with an experienced title transfer attorney can help ensure that the transaction is done properly and avoid legal disputes. 

Which Situations May Require a Title Transfer? 

A title transfer may be required in the following situations:

• Adding a spouse or partner to a title;
• Removing a spouse or partner from a title;
• Transfer of title from an individual(s) into a Corporation, Partnership, LLC, or a Trust;
• Transfer from a company into personal names as tenants in common (could be required in situations with 1031 exchange when partners are wishing to split the partnership);
• Transfer from an estate to an individual’s personal name in the case of an inheritance. 

New York Deed Transfer Lawyers

Natalia A. Sishodia, Esq., LL.M.

Natalia A. Sishodia is a top-rated New York City attorney with extensive experience handling complex deed transfers, real estate transactions, and wealth planning for both domestic and international clients. Her sophisticated legal skill is matched by her ability to tailor nuanced strategies for high-net-worth individuals, businesses, and international investors. With fluency in both English and Russian, Ms. Sishodia provides seamless legal guidance across cultures and jurisdictions, particularly in NYC’s fast-paced real estate market.

She regularly handles deed transfers involving condos, co-ops, and single- or multi-family properties, delivering smooth, efficient closings that her clients praise as being “stress-free.” Her knowledge extends to 1031 exchanges, leasing, and luxury real estate matters. A tireless advocate for personalized planning, she also provides estate planning, safeguarding assets, securing legacies, and respecting international considerations in every legal decision.

Beatrice Raccanello, Esq., LL.M., MBA

Beatrice Raccanello brings a globally informed and detail-oriented approach to deed transfer and real estate law in New York City. With deep experience representing buyers and sellers across all property types, including co-ops, condos, and multi-family buildings, Ms. Raccanello excels in due diligence, contract negotiations, and closing preparation. Her multilingual skills (English, Italian, Spanish, and conversational French) make her especially effective with international clients working through U.S. legal systems.

She enhances the firm’s transactional efficiency through her business law background, advising on business formation, compliance, and contract drafting. Beatrice’s legal career has included leadership roles in legal ethics and compliance, which inform her high standards of professionalism and client service. With advanced degrees in law and strategic management, she is uniquely equipped to support NYC deed transfers with legal and business precision.

How To Transfer Property Title Without Paying Taxes

The addition of an individual to a property deed can happen through inheritance, marriage, or partnership, leading to a significant change in ownership interest. It is crucial to understand that adding someone to a deed typically involves the transfer of property ownership, which may come with potential tax implications.

However, being added to a property deed could make you eligible for specific property tax exemptions or deductions, particularly if the property serves as your primary residence.

Conversely, there might be capital gains tax implications upon the sale of the property. The tax implications are contingent on variables such as the length of ownership and fluctuations in the property’s value. Maintaining meticulous records of the property’s cost basis and any enhancements is crucial for accurately calculating capital gains.

Handling property transactions requires a seasoned professional who understands the intricacies of tax implications and legal nuances. Our dedicated New York real estate attorneys at Sishodia PLLC are committed to providing comprehensive solutions tailored to your specific needs. With years of experience in the field, our attorneys can assist you in facilitating tax-efficient property title transfers, ensuring a smooth and cost-effective transition. Contact us today to schedule a consultation.

Transfer Method	Possible Tax Benefit	Tax Considerations
Inheritance	May qualify for property tax exemption	Change in ownership may have capital gains implications
Marriage or Partnership	May qualify for property tax exemption	May involve a transfer of ownership interest
Sale of Property	None stated	Capital gains tax based on cost basis and enhancements

What Are the Standard Payments of Transfer Taxes?

In addition to the preparation of a deed, sellers must also be aware of transfer taxes imposed on the conveyance of real property. New York State imposes a real estate transfer tax on conveyances of real property or interest when the consideration exceeds $500. The tax is computed at a rate of two dollars for each $500 of consideration, which is 0.4%. New York State also imposes a ‘mansion tax’ on transfers of residential property where consideration is $1 million or more, but that is imposed on the buyer rather than the seller. 

New York City imposes an additional Real Property Transfer Tax (RPTT) which must be paid on transfers of real property. RPTT applies whenever the sale or transfer is more than $25,000. This includes state or federal government-owned property transferred to a non-government entity. New York City Transfer tax rates range from 1% to 2.625%, depending on the type of property and the selling price.  

On July 1, 2019, New York adopted legislation that increased the real estate transfer taxes on conveyances of real property located in New York City. The new legislation added an additional layer of transfer tax. In addition to the 0.4% tax, a tax of 0.25% is added when consideration for the entire conveyance of residential real property is $3 million or more, and for any other real property that is $2 million or more. The rates are published in Form TP-584-NYC-I, Instruction for Form TP-584-NYC. Feel free to use our calculator to estimate your closing costs for the deed transfers related to sales. 

Do Transfer Taxes Apply to Cooperative Housing Stock Transfers?

When transacting cooperative housing stock in New York City, understanding the applicable transfer taxes is crucial. Unlike traditional property sales, cooperative housing transactions involve the transfer of shares in a corporation rather than direct real estate. As a result, New York State’s real estate transfer tax, which typically applies to direct property transfers, does not apply to the transfer of cooperative shares.

However, New York City imposes its own Real Property Transfer Tax (RPTT) on transactions involving cooperative units. The RPTT is relevant because the transfer of cooperative shares is considered an indirect transfer of a real property interest. This tax is assessed based on the value of the shares transferred, which correlates to the underlying real estate value represented by those shares.

While cooperative shares are treated differently from traditional real estate, the RPTT still applies, and additional fees like flip taxes may also come into play. To ensure compliance with all transfer tax obligations and avoid unexpected financial implications, consulting an NYC real estate attorney with experience in cooperative transactions can help tackle the specific tax requirements and provide clarity on the financial aspects of the transfer, ensuring the process is smooth and fully compliant.

Who Is Exempted From Paying Transfer Taxes?

Usually, the seller is responsible for paying the transfer taxes and unfortunately, most sellers are subject to the transfer tax. Essentially, the government is exempt from the tax. RPTT outlines specifically who is exempt from transfer tax in New York, including:

1. The United States Government and its agencies;
2. New York State, its agencies and political subdivisions; and
3. A foreign government, a person acting on behalf of a foreign government, or the head of a foreign government’s diplomatic mission. The premises must be used exclusively for diplomatic or consular purposes. Other usages may result in payment of the tax. 

If the government entity is transferring the property to a non-government entity, the non-government entity must file a return and pay the tax. 

In addition, there are properties that are exempt from the transfer tax but must be reported on an RPTT return. This includes a deed, instrument, or transaction:

1. To or from the United Nations or any other worldwide, international organization where the US is a member;
2. To or from a non-profit organization formed and operated exclusively for religious, charitable or educational purposes, or for the prevention of cruelty to children or animals;
3. To any government body exempt from payment of the tax.;
4. Given solely as security for a debt or a deed/instrument given solely to return such security;
5. From an agent, dummy, straw man, or conduit to his principal, or a deed, instrument, or transaction from the principal to his agency dummy, straw man or conduit;
6. Given by an executor outlined within the terms of a will. However, a deed given by an executor in connection with a sale of an interest in real property is taxable;
7. That affects a mere change of identity or form of ownership or organization but only to the extent that the beneficial ownership remains the same.

From the practical standpoint, it is important to know who are the parties to the Contract of Sale.

What Happens If You Don’t Pay the NY Transfer Tax?

Failing to pay the New York transfer tax can lead to serious financial and legal consequences. Under New York Tax Law, late filing or payment can result in a penalty of 5% of the tax due, accruing monthly, up to a maximum of 25%. Additionally, interest is charged on unpaid taxes at the rate of 1% per month. This can make the total amount owed grow quickly over time.

One of the most serious consequences is the risk of a tax lien. A lien is a legal claim the government places on a property due to unpaid taxes. This lien stays attached to the property until the full amount is paid. A lien can prevent the property owner from selling or refinancing the property. Lenders will usually not approve a mortgage or refinance if the title is clouded by an outstanding tax debt.

While the seller is typically responsible for paying the transfer tax, failure to handle it properly can affect the buyer, too. If the tax isn’t paid, the county clerk may refuse to record the deed, stopping the legal transfer of ownership. That means the buyer could end up owning a property with title issues.

These risks make it clear that transfer taxes must be handled accurately and on time. An experienced New York deed transfer attorney at Sishodia PLLC can help you avoid mistakes that lead to liens, penalties, or delays in your transaction.

Do I Need To Pay Transfer Taxes When the Transfer Is a Gift?

A gift does not include the exchange of consideration and therefore is exempt from transfer taxes. However, New York Tax Law Sec. 1401 (d) defines consideration to also include the cancellation or discharge of an indebtedness or obligation, the amount of any mortgage, purchase money mortgage, lien, or other encumbrance, whether or not the underlying indebtedness is assumed or taken subject to. Therefore, when a gift includes the transfer of a mortgage liability on the property, the relief from indebtedness is considered as consideration on the property and transfer taxes do apply. 

Attorney advertisement. This article is for educational purposes only, not legal or tax advice. Prior results do not guarantee future outcomes. If you are in need of legal or tax advice related to title transfer, or whether a deed transfer would violate the terms of your mortgage; or advise you on the best way to take title (ex: tenants in common or joint tenants with right of survivorship), our experienced real estate attorneys may be able to help. Contact us today at (833) 616-4646 to schedule a consultation or leave your contact details on our online form now to get in touch so you can make the process of buying and selling a home simultaneously go as smoothly as possible.

from Sishodia PLLC https://sishodia.com/do-i-need-to-pay-transfer-taxes-when-transferring-title/

How to Buy an Investment Property in New York City

Real estate investment gets talked about a lot these days and for good reason. If you’re in a position to invest, property can offer steady income and long-term growth. It’s not about short-term trends or fast payouts. Often, the most rewarding investments are the ones you hold onto, letting them build value while providing income over time.

That said, buying investment property in New York isn’t always easy. There’s a lot to think about, and a lot that can trip you up if you’re not careful. Contracts, local regulations, title concerns, these are just a few of the things that can catch new and even experienced investors off guard.

If you’re planning to buy property in NYC, it helps to have the right people on your side. At Sishodia PLLC, our New York City real estate attorneys work with investors every day. We’re here to guide you through each step, from checking out the property to reviewing contracts and handling the legal side of things, so you can move forward with confidence. 

Contact us at (833) 616-4646 to schedule a consultation and let us help you secure passive income through real estate in New York.

Is Buying Property in NYC a Good Investment?

As one of the most consistent investment locations in the United States for appreciation, New York City is one of the best places to own investment property for generating rental income. Given its history of recovering and flourishing after economic downturns, investing in New York City real estate is often considered a robust choice. 

The diversity of property types and neighborhoods in NYC allows investors to find options that align with their investment strategies and financial objectives. The city offers a broad array of properties to choose from, such as residential units, commercial spaces, or mixed-use buildings. In most cases, all an investor needs to have in their portfolio can be a couple of New York City apartments to see an appreciable cap rate. 

As a huge financial and business hub, Manhattan and the surrounding areas may not offer the best investment deals. The market in Manhattan is consistently high-priced and in great demand, and sellers are not nearly as motivated to work with a buyer as they may be in other areas because they simply don’t need to be. Moreover, it’s important to acknowledge that the NYC real estate market is subject to fluctuations. Economic trends, policy changes, and global events can all impact property values and market stability. This volatility means that potential investors should approach the market with caution and informed judgment.

While buying property in NYC can be a good investment, it requires careful planning, a clear understanding of the market, and readiness to manage potential risks. Your goals, whether you’re aiming for long-term capital growth, seeking rental income, or pursuing short-term gains, will shape the strategies for your investment and help make it a worthwhile decision.

Before making any important investment purchases, conducting extensive research and assessing your financial readiness to handle the ups and downs of real estate investment is crucial. It’s advisable to consult with a New York City real estate attorney who understands the local market dynamics and can provide valuable insights and guidance tailored to your specific situation.

Up and Coming Neighborhoods and Boroughs

But there are many up-and-coming areas around the city that can be potentially suitable long-term investments for individuals, providing they are willing to make some repairs and renovations and have a little bit of patience. Looking at areas just outside of already well-established neighborhoods may still offer more reasonable pricing while piggybacking on their surrounding neighborhood’s popularity.

While the main goal for real estate investment is to buy low and sell high, there are some boroughs and neighborhoods that have greater long-term potential for the future. This results in less risk and downside volatility should that happen in the future and equates to a more optimal potential return on investment.

New York City Real Estate Attorneys- Sishodia PLLC

Natalia A. Sishodia, Esq., LL.M.

Natalia A. Sishodia is a dedicated New York City real estate attorney and managing partner of Sishodia PLLC, representing both domestic and international clients in high-value property transactions. Known for her meticulous planning and calm, results-driven approach, Ms. Sishodia has successfully negotiated and closed hundreds of complex deals across condos, co-ops, townhouses, and multifamily investments. She is a go-to advisor for high-net-worth individuals, celebrities, and global investors involved in the New York property market. Her legal knowledge also spans business law, elder law, estate planning, and tax law.

Ms. Sishodia provides legacy-building legal services that include cross-border estate and tax planning, as well as legal solutions tailored to cryptocurrency and digital assets. Fluent in English and Russian, she has advised clients from over a dozen countries. Committed to giving back, she has worked with the United Nations and leads seminars educating New Yorkers on their rights. She has received honors such as the Avvo Client’s Choice Award and The Award for Outstanding Achievement in International Law.

Beatrice Raccanello, Esq., LL.M.,MBA

Attorney Joseph A. George focuses his practice on helping people injured in car accidents and other personal injury matters throughout Western Pennsylvania. With years of hands-on experience handling crash-related claims, he understands how difficult it can be to deal with medical treatment, lost income, and insurance company pressure all at once. He works closely with clients to build strong cases and seek fair compensation for the harm they’ve suffered.

Joseph is widely recognized among his peers and has been selected to the Pennsylvania Super Lawyers list every year from 2018 through 2024. He’s an active member of the Pennsylvania Bar Association, the Pennsylvania Trial Lawyers Association, and the American Association for Justice. He also holds an AV Preeminent rating from Martindale-Hubbell, a mark of strong legal ability and high ethical standards. His steady, client-focused approach is trusted by individuals and families looking for help after a serious accident.

How Do You Finance an NYC Investment Property?

Financing an investment property in New York City is different from buying a primary residence. Most lenders view investment properties as riskier, so they often require a larger down payment, typically 25% or more of the purchase price. That’s a significant amount upfront, so it’s important to plan accordingly.

Lenders will also take a hard look at your finances. Expect them to closely examine your debt-to-income ratio, credit score, and available cash reserves. They want to know you can handle the mortgage even if the property doesn’t produce steady rental income right away.

The most common type of loan for investment properties is a conventional loan. These come with stricter qualifying criteria than loans for primary homes, but they’re widely available. There are also lenders in the market who focus on working with real estate investors, offering products tailored to income-generating properties.

Some investors explore portfolio loans or commercial mortgages, depending on the property type and size. Others may use hard money loans for short-term financing needs, though these come with higher interest rates.

Financing an NYC investment property means coming in with more capital, solid financials, and a clear plan. It’s important to compare lenders and loan options carefully; each one will have different terms, rates, and expectations based on your profile and the property in question.

New York City REITs

Investors, both local and global, can participate in New York City’s real estate market through real estate investment trusts (REITs). Investors can take advantage of REITs to participate in the investment of commercial or residential properties, along with mortgage loans. What sets New York City REITs apart is their exclusive focus on prestigious commercial or retail buildings which are prime and in-demand pieces of real estate.

In essence, REITs provide investors with the ability to access a diversified portfolio of properties that are traded similarly to stocks. This arrangement ensures a consistent stream of dividend income since REITs are mandated to distribute 90% of their taxable income to shareholders annually in the form of dividends. Additionally, investing in REITs offers diversification opportunities. However, it’s important to note that REITs can be affected by risks associated with rising interest rates.

Prior to making any investment decisions, it is recommended to seek guidance from a New York City real estate attorney. At Sishodia PLLC, our attorneys have extensive knowledge and experience in the real estate industry. Consulting with us allows you to make well-informed investment decisions. Take the initial step toward maximizing your real estate investments by scheduling a consultation with Sishodia PLLC today.

Using an LLC to Avoid Common Pitfalls When Investing in Real Estate in NYC

Investing in New York City real estate offers significant profit potential but is not without its legal and financial challenges. Establishing a Limited Liability Company (LLC) provides a strategic way to minimize these risks and protect your investment. An LLC offers significant protection by separating personal assets from business liabilities, meaning personal property and finances are shielded in case of lawsuits or debts incurred by the property.

One significant benefit of using an LLC in NYC is the limitation of personal liability. Should legal action arise from incidents at the property, such as tenant disputes or accidents, the LLC structure means that only the assets within the LLC can be targeted, not the personal assets of the owner. This separation provides a secure barrier against personal financial risk.

Another benefit is the potential ease of property transfer and tax advantages. Real estate owned by an LLC can be transferred by changing membership interests in the LLC itself, rather than transferring the actual real estate, which may reduce the costs associated with title transfers and minimize exposure to transfer taxes. In New York, LLCs have the option to elect pass-through taxation. This approach allows profits to be taxed solely at the individual member level, eliminating the double taxation that corporations typically face.

Additionally, operating through an LLC can enhance credibility with lenders and tenants, which is particularly valuable in the competitive New York City market. Banks might be more willing to lend to an LLC, and tenants often view an LLC as a more formal and stable management structure.

For real estate investors in NYC, setting up an LLC is a prudent step to mitigate risks associated with direct ownership, streamline management, and optimize fiscal outcomes. It is advisable to consult with a legal professional familiar with New York real estate and business law to tailor the LLC to specific investment needs and goals. 

Taking a Long-Term Approach

Unless you are specifically looking at the property from a flipping perspective, you should expect to hold onto it for a significant period of time to capture the greatest amount of return and hedge against any real estate market volatility.

Purchasing a property that is within your budget, financially self-sustaining, and has a good future prospect for appreciating in value requires a great deal of research and knowledgeable market insight. A good investor will typically work with an experienced agent and real estate attorney who understands investment property in New York City.

If you are considering buying an investment property in New York City, you will want one with critical experience with investment property purchases. Contact the NYC real estate attorneys at Sishodia PLLC at (833) 616-4646 or schedule a consultation through our online contact form.

from Sishodia PLLC https://sishodia.com/how-to-buy-an-investment-property-in-new-york-city/

Loan Type	Typical Requirements	Best For
Conventional Loan	25% or more down payment, good credit, reserves	Long-term investors with steady income
Portfolio Loan	Flexible terms, held by lender	Unique properties or non-traditional cases
Hard Money Loan	Short-term, high rates, quick approval	Flippers or fast-close situations

NY Probate Process: Is Having a Will Enough?

We often see and hear that everyone needs to have a will, but what exactly is a will and what does it entail? A will or testament is a legal document that expresses a person’s wishes as to how they want their property to be distributed upon their death, and as to who will manage the property through its final distribution. 

A will by itself does not affect property ownership, and it still must go through probate. New York law does not require you to hire an attorney to start a probate proceeding, as some other states do. It is possible for your assigned executor to handle probate herself or himself; however, most probate matters are challenging and require the assistance of a Manhattan estate planning lawyer to save time and avoid aggravation.

Estate planning is highly subjective; each client and case is unique. At Sishodia PLLC, we recommend consulting with our knowledgeable estate planning attorneys to review your particular case and achieve your distinct estate planning goals. Contact us at (833) 616-4646 to take the first step toward peace of mind and a comprehensive estate plan tailored to your unique needs. Start estate planning today and secure your future.

What Happens When a Real Estate Property Goes Through Probate?

Probate is the legal process that takes place after someone passes away, regardless of whether they left a will. It involves settling debts, filing estate taxes, and distributing remaining assets. When real estate is part of the estate, the process can become more drawn out and costly, especially if the estate lacks liquidity.

The court appoints a personal representative to manage the estate, notify creditors, and handle necessary filings. If the estate’s debts exceed available funds, the court may require the sale of real property. For beneficiaries, this can mean inheriting far less than expected, or not inheriting the property at all.

Coop apartments in New York City complicate things further. A will can leave coop shares to a beneficiary, but transfer and occupancy still depend on the coop board’s approval. If the board denies the transfer, the shares must be sold, regardless of the deceased’s wishes.

Key considerations:

• Debts and taxes must be paid first – Creditors and tax authorities are prioritized in probate. Only what remains after these obligations are met can go to the heirs.
• Real property can be sold to cover obligations – If the estate lacks sufficient cash to pay debts, the court may order the home sold. Beneficiaries may only receive whatever is left after the sale and expenses.
• Probate in New York is not quick – It typically takes four to nine months or more. During this time, the estate cannot be fully distributed, and property cannot be easily transferred or sold without court approval.
• Disputes can delay everything – Creditors, disinherited relatives, or other interested parties may challenge the will or file claims, slowing down or complicating the estate settlement.
• Coop apartments add legal barriers – Inheriting a coop is not automatic. The board must approve the new owner, and failure to qualify means the shares must be sold, not transferred.

To reduce delays and preserve the value of your assets, proper estate planning is essential. The New York real estate attorneys at Sishodia PLLC can help you make informed decisions that protect your property and ease the burden on your loved ones.

Transferring Assets Outside of Probate

Some assets, like the proceeds from retirement accounts, proceeds of an insurance policy, a 401k and IRA, and other accounts with a named beneficiary, property, or shares on the stock certificate owned by parties as joint tenants with a right of survivorship are not subject to the probate process and they pass to the named beneficiary or surviving tenant.

If you and your domestic partner have rights of survivorship in your home, then the surviving partner keeps the home when the first partner dies. In the case of a legal marriage, if the title is held by spouses as tenants by the entirety or as “husband and wife”, in the case of the death of one spouse, there is an automatic transfer of ownership to the surviving spouse. For someone besides your spouse to inherit your home without it going through probate, the best choice may be to set up a living trust and transfer ownership of the home to it. The main advantages of putting your home into trust are avoiding probate, saving on estate taxes, and even protecting your home from certain creditors.

How to Avoid Probate in NY?

Avoiding probate in New York involves several straightforward strategies, each with specific factors to consider. Those interested in this process should explore legal methods such as living trusts, payable-on-death designations, and joint property ownership.

• Living Trusts: One effective method is creating a living trust, which involves transferring your assets to the trust during your lifetime. Upon your passing, a trustee will oversee the management and distribution of these assets to your beneficiaries as specified in the trust. This approach not only helps avoid probate but can also provide privacy and facilitate quicker distribution to your beneficiaries.
• Payable-on-Death Designations: Another option is to use payable-on-death (POD) designations, which can be applied to bank accounts, retirement accounts, and various financial instruments. Designating a beneficiary ensures that these assets transfer directly to them upon your passing, bypassing the probate process. It is a simple yet effective tool for providing immediate access to funds or assets, thereby reducing potential delays and complications.
• Joint Ownership: Joint ownership is a practical choice, particularly for real estate. Ownership shared between parties, such as with siblings or spouses, means that upon the death of one owner, the property automatically passes to the surviving owner(s) without the need for probate intervention. This method is particularly useful for seamlessly transferring property while avoiding legal hurdles.

Each strategy presents both benefits and limitations, with the best option depending on individual circumstances and goals. Evaluating your needs and consulting with an experienced New York estate planning attorney can assist you in making informed decisions.

New York Probate Process

The probate process involves several steps. The court must first receive the original will of the deceased along with a petition for probate. After receiving notice from the court, anyone with an interest in the will be notified. A guardian ad litem may be appointed by the court for minors or those with incapacity.

After the court has established that New York State is the valid jurisdiction and the will is in a valid form, it will issue the decree or court order granting probate. Letters testamentary will be sent to the executors named by the deceased.

Executors have the power to manage and take care of the estate. The executor is also responsible for identifying and making an inventory of all the assets of the deceased, paying taxes and debts, as well as distributing the property according to the will.

A relatively simple probate process may take only a few days. In some cases, however, probate can take longer. In cases when a relative or another person is incompetent or contests the will, this can be especially true.

Good estate planning can help you avoid having your family members go through probate to distribute your assets. Many estate planning tools allow you to remove assets from probate so that they do not go through this process.

A trust is a common method to avoid probate in New York. The trustee will manage the trust property on behalf of your beneficiaries. The property becomes part of your probate estate once it is placed in trust.

What Assets Does a Will Not Cover in New York?

In New York, not all of your assets will pass through your will. Certain types of property bypass the probate process entirely because they are legally structured to transfer directly to a beneficiary. These assets are not governed by the terms of your will, regardless of what it says.

Accounts and policies with designated beneficiaries are a primary example. Life insurance proceeds, 401(k)s, IRAs, and other retirement accounts typically require you to name a beneficiary when you open the account. Upon your death, these assets go directly to the named individuals and are not subject to the instructions in your will. The same rule applies to payable-on-death (POD) or transfer-on-death (TOD) bank accounts, as well as jointly owned property with rights of survivorship. For instance, a joint bank account will pass automatically to the surviving co-owner, not through probate.

Additionally, the law limits how long you can control your assets after death. Under the “rule against perpetuities,” you cannot leave property or funds to a person who is not yet born and may not be for generations. This rule prevents someone from imposing long-term restrictions on property ownership and use far into the future.

Because these exceptions can cause confusion or conflict during estate administration, it’s important to align your estate plan, including your will, trusts, and beneficiary designations, to reflect your intentions clearly.

How Long Do You Have to File a Probate After Death?

There is no specific deadline set by the law for filing probate after a person’s death. However, it is highly recommended to commence the probate process promptly, as it may require several months to a year to reach completion. Below is a general outline of the probate timeline in New York:

Here is a general timeline for probate in New York:

• Three months: The submission of a copy of the death certificate, will, and probate petition to the New York Surrogate’s Court will be carried out by either the executor or a probate attorney. Subsequently, the court will issue letters of administration, granting the executor the authority to act on behalf of the estate. The executor will then compile an inventory of the assets and inform the deceased person’s creditors of their passing. Additionally, the estate’s property will be appraised, sold to settle debts, or distributed to the beneficiaries.
• Six months: By the end of the sixth month, it is the responsibility of the executor to ensure the payment of creditors, address any potential disputes, and complete the necessary filing of Federal Income Tax return forms 1040 and 1041.
• Nine months: Ideally, in a smooth case, the court should distribute the estate’s assets to the beneficiaries, discharge the personal representative (executor), and close the estate. However, various challenges such as will contests, litigation from creditors, or a larger estate may prolong the process. Additionally, it is important to be aware that the New York state estate tax must be paid within a nine-month period following the death of the individual.

Please keep in mind that these timeframes are approximate and can vary depending on the complexity of the estate and any legal challenges that may arise during the probate process. It is essential to seek guidance with an experienced New York City estate planning lawyer to guide you through the specific requirements and processes in your situation. Contact Sishodia PLLC today to schedule a consultation.

General Timeline for Probate in New York	Actions
Three months	Submit a copy of the death certificate, will, and probate petition to the New York Surrogate’s Court. Court issues letters of administration. Executor compiles inventory of assets. Inform creditors of the deceased. Appraise, sell, or distribute estate’s property.
Six months	Ensure payment of creditors. Address potential disputes. Complete filing of Federal Income Tax return forms 1040 and 1041.
Nine months	Ideally, distribute estate’s assets to beneficiaries. Discharge the personal representative (executor). Close the estate.

Contact Sishodia PLLC About Your Estate Planning

While having a will is a crucial part of preparing your estate, it does not bypass the probate process in New York. A will provides direction for how your assets should be distributed, but the estate must still go through probate court for validation and administration. Without careful planning, this can result in delays, legal fees, and complications, especially if your estate includes property like a home or coop apartment. Beneficiaries may encounter unexpected obstacles, and in some cases, assets may have to be sold to cover debts or taxes before anything is passed down.

To truly protect your legacy and minimize the burdens your loved ones may face, comprehensive estate planning goes beyond a simple will. Tools like trusts, advance directives, and strategic asset titling can reduce or even eliminate the need for probate. A knowledgeable New York estate planning attorney can guide you through the best options based on your personal and financial circumstances. Contact Sishodia PLLC today at (833) 616-4646 to discuss how you can preserve your assets and bring peace of mind to your family.

from Sishodia PLLC https://sishodia.com/ny-probate-process-is-having-a-will-enough/