Flip tax in NYC: what it is, who pays, how it's figured

A flip tax is a fee a NYC co-op charges when an apartment is sold, set by the building, not the government, and commonly 1–3% of the sale price.#

Last updated: 2026-11-11. General information, not legal, tax or financial advice. Rates and rules change, so confirm the numbers for your deal with your real estate attorney and lender.#

A flip tax is a transfer fee that a co-op (and occasionally a condo) collects when an apartment changes hands. Despite the name, it is not a government tax: the money goes to the building, often into its reserve fund. Each building sets its own, usually in its proprietary lease or by-laws, and some have none. The most common form is a percentage of the sale price, typically 1–2% and sometimes up to about 3%. The seller usually pays, but some buildings put it on the buyer, and it is always worth checking before you bid.#

The rates in the examples are illustrations, not standards. Every building's formula is different.#

It is a charge the co-op corporation imposes on its own shareholders under its governing documents. New York's Business Corporation Law §501(c) normally requires every share of the same class to be treated equally. For residential co-ops, the statute says shares are not made unequal by fees or charges payable to the corporation on the sale or transfer of shares, if those fees are provided for in the proprietary lease, the offering plan, or a properly approved amendment.#

That wording is a response to the courts. In 1985, in Fe Bland v. Two Trees Management Co., New York's Court of Appeals struck down a flip tax that charged sellers differently depending on whether they had bought from the sponsor and how long they had owned. The Legislature amended §501(c) in 1986 to put flip taxes written into a co-op's documents on firm statutory footing. Disputes since then have mostly been about whether a particular building adopted its flip tax properly, for example by amending the lease with a shareholder vote rather than by board resolution alone. That is a question for your attorney, not something to settle from the listing.#

The flip tax is separate from the government's transfer taxes. On a co-op sale, the NYC and New York State transfer taxes still apply, and the seller customarily pays them. See the NYC transfer tax guide.#

Percent of price. The most common method. Brick Underground's sources put most buildings at 1–2% of the sale price, with some prime Manhattan buildings up to about 3.5%. Some buildings scale the rate down the longer the seller has owned.#

Percent of profit. A share of the seller's gain, such as 10% or 20% of the profit. This hits sellers who bought cheaply, such as original insiders at the conversion, much harder than recent buyers. The building's documents define "profit" (whether improvements count, for example).#

Per share. A fixed amount for each share the seller owns. Larger apartments carry more shares, so they pay more, regardless of price.#

Flat fee. A set dollar amount per sale. Less common, and usually smaller.#

Some buildings combine methods, or set a different formula for sponsor or "unsold shares" sales. Income-restricted HDFC co-ops can charge far more, sometimes over 10% of the price, to keep the apartments affordable.#

By custom in New York City, the seller pays. Most buildings' documents say so. A few put it on the buyer, and in any building the two sides can negotiate who bears it, or split it. The co-op generally cares only that it is paid at closing.#

A buyer still has reasons to care:#

The rates below are illustrations within typical ranges, not any building's actual terms.#

$750,000 sale of a co-op the seller bought for $600,000#

$1,200,000 sale of a co-op the seller bought for $1,000,000#

At $1,200,000 the buyer also owes New York State's 1% mansion tax, $12,000, which applies to co-op purchases of $1 million or more. See the mansion tax guide. If the building puts the flip tax on the buyer, a 2% flip tax at that price adds another $24,000.#

Condos rarely have flip taxes. The co-op vs condo guide covers the other cost differences, and the closing costs guide lists everything else a buyer pays.#