A property sells for $800,000 in NYC. The transfer tax (state + city) is approximately:
Question & Answer
Review the question and all answer choices
$3,200
A is incorrect because $3,200 represents only 0.4% of the sale price, which is just the state transfer tax rate. This option ignores NYC's additional city transfer tax, making it too low for a property in this price range.
$14,000
$8,000
C is incorrect because $8,000 represents 1% of the sale price, which doesn't correspond to any standard NYC transfer tax rate. This option may result from averaging different tax rates incorrectly.
$20,000
D is incorrect because $20,000 represents 2.5% of the sale price, which exceeds the maximum combined transfer tax rate in NYC. This rate might apply to luxury properties with additional surcharges, but not to this $800,000 property.
Why is this correct?
B is correct because NYC's combined state and city transfer tax for properties over $500,000 is approximately 1.75%. Calculating 1.75% of $800,000 equals $14,000, which matches option B. This rate reflects both the state transfer tax (0.4%) and NYC's additional tax (1.4%) for properties above $500,000.
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