New York transfer taxes are paid by:
Question & Answer
Review the question and all answer choices
The buyer only
A is incorrect because while buyers often pay many closing costs, New York specifically mandates that the seller pay the transfer tax. The misconception here is assuming all transaction costs fall to the buyer, which isn't the case for this particular tax.
The seller, with mansion tax paid by buyer
Split equally
C is incorrect because New York does not split these taxes equally. The transfer tax and mansion tax have different statutory assignees, with the seller paying the transfer tax and the buyer paying the mansion tax when applicable.
The lender
D is incorrect because lenders are not responsible for property transfer taxes in New York or any other state. Lenders may collect funds for escrow of property taxes, but transfer taxes are a closing cost allocated between buyer and seller.
Why is this correct?
B is correct because New York law requires the seller to pay the standard transfer tax, while the buyer is responsible for the mansion tax on properties exceeding $1 million. This dual-tax structure with different payees is unique to New York and must be memorized for the exam.
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