HIDE

Other Publications

Insights

Publications

New York State Says No to Annual Pied-A-Terre Tax, Yes to Increased Real Estate Transfer Taxes

New York State Says No to Annual Pied-A-Terre Tax, Yes to Increased Real Estate Transfer Taxes

As part of New York State’s annual budget process, law makers proposed an annual pied-à-terre tax on homes worth $5 million or more that do not serve as the buyer’s primary residence.  At the last minute, the tax was dropped and replaced by a 0.25 percentage point increase to the real estate transfer tax on sellers and a new graduated mansion tax, a special transfer tax imposed on purchasers.  Nina Krauthamer addresses the ins and outs of both taxes.

Read More

New Developments in the World of Reverse Like-Kind Exchanges

New Developments in the World of Reverse Like-Kind Exchanges

Tax planners to New York City real estate families understand that real estate should never be sold.  Rather, it should be exchanged in a tax-free, like-kind exchange.  The exchange can be bifurcated into two independent transactions – one a purchase and the other a sale – without affecting tax-free treatment, provided certain well identified rules are followed.  Moreover, the replacement can be acquired before the sale of an existing parcel is effected.  In a recent advisory opinion affecting property in New York State, the Department of Taxation and Finance issued a taxpayer-friendly advisory opinion involving real estate transfer tax exposure in a reverse like-kind exchange.  Rusudan Shervashidze and Nina Krauthamer explain the ruling. 

Read More

In the Matter of GKK 2 Herald LLC – Effects of the Step Transaction Doctrine

In the Matter of GKK 2 Herald LLC – Effects of the Step Transaction Doctrine

Clients that invest in U.S. real property have discovered that income tax planning for the structure is only once piece of the planning puzzle.  A second piece relates to the imposition of transfer taxes on the sale.  If the property is in New York City, planning must consider the real property transfer tax rules of both the city and New York State.  Both jurisdictions impose tax.  Rusudan Shervashidze looks at recent cases in the State of New York Division of Tax Appeals Tribunal and the New York City Appeals Tribunal involving the same plan, implemented by the same taxpayer, regarding the same parcel of real property.  For New York State purposes, the plan was successful.  However, for New York City purposes, the plan was overturned.  The statutes at the state and city level are almost identical.

Read More