NYC Finance Department Rules on Cooperative Unit Transfer Tax

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The New York City Department of Finance issued a letter ruling on the applicable real property transfer tax rate for the sale of shares associated with two cooperative units. The department ruled that, based on the restrictions on use and transfer of the servants' room unit, which could only be held by the owner of the residential unit for limited purposes, the sale should be treated as a transfer of an individual cooperative unit subject to the lower 1.425 percent tax rate rather than the higher bulk sale rate.

Why it matters

This ruling provides clarity on the appropriate transfer tax rate for sales of cooperative unit shares, which can have complex ownership and usage restrictions. The decision could impact the costs and procedures for buyers and sellers of cooperative properties in New York City.

The details

The New York City Department of Finance issued the letter ruling in response to a specific case involving the sale of shares associated with two cooperative units. One of the units was designated as a "servants' room" that could only be held by the owner of the main residential unit and had restrictions on its use and transfer. The department determined that, due to these limitations, the sale of the servants' room shares should be taxed at the lower individual cooperative unit rate of 1.425 percent, rather than the higher bulk sale rate.

• The New York City Department of Finance issued the letter ruling on February 3, 2026.

What’s next

The ruling provides clarity that could impact the tax treatment and costs for future sales of cooperative units with restricted-use spaces in New York City.