Redacted Letter Rulings - Real Property Transfer Tax (RPTT)

Written by the Department of Finance Legal Affairs Division, letter rulings are written statements that set forth the applicability of the statutes and rules to a specific set of facts and are provided in redacted form to protect taxpayer-specific information.

The sale of two cooperative units that were combined and used as a single residence is treated as the sale of an individual cooperative unit. #23-5030 2/12/24
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Sale of two adjacent condominium units that had been used as a single residential dwelling, where the purchaser submitted proof of intention to combine, should be treated as the sale of an individual condominium unit subject to the lower tax rate under Administrative Code § 11-2102.a(9)(i). #22-5021 5/18/23
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Taxpayers’ sale of two cooperative units that were combined prior to sale is treated as the sale of an individual cooperative unit. #22-5023 8/23/22
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In a sale of commercial real property where residential real property is used to satisfy part of the consideration, the RPTT will apply twice: once to the transfer of the commercial property and once to the transfer of the residential property. #22-5019 8/23/22
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Sale of a single condominium apartment unit along with two noncontiguous studio units, the ownership and use of which is substantially restricted under the condominium’s by-laws, should be treated as the sale of an individual condominium apartment subject to the lower tax rate schedule for Real Property Transfer Tax provided in Code section 11-2102(a)(9)(i). #22-5022 7/21/22
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Distribution of unsold units in a condominium development to the members of the owner LLC where each member receives a share of the units equal to their interest in the LLC is exempt as a mere change of form #22-5020 7/21/22
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Conveyance structured in accordance with statement of audit procedure RPTT-2008-03 will qualify for the “dummy/straw man” exemption to the RPTT. #22-5015 3/30/22
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In the absence of information suggesting that DOF classification of a single family home with an office as class 1 is incorrect, the property is taxed at the lower rate applicable to one, two, and three-family houses. #21-5014 11/18/2021
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In the absence of information suggesting that DOF classification of a two-family home with a large garage as class 1 is incorrect, the property is taxed at the lower rate applicable to one, two, and three-family houses. #19-4997 11/9/2020
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In the absence of information suggesting that DOF classification of a single family home with a store as class 1 is incorrect, the property is taxed at the lower rate applicable to one, two, and three-family houses. #18-4994 2/5/2020
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Sale of two adjacent condominium units that had been used as a single residential dwelling, where the purchaser submitted proof of intention to combine, should be treated as the sale of an individual condominium unit subject to the lower tax rate under Administrative Code § 11-2102.a(9)(i). #19-4995  4/17/2019
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A one-family house, with commercial space occupying approximately one-fifth of the total square footage of the property, is treated as residential for purposes of the RPTT. #19-4998  7/9/2019
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The sale of adjacent cooperative units that were intended to be combined into one, where substantial work had been completed with regard to the combination, is treated as subject to the lower tax rate.  #16-4980  7/30/18
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The sale of two noncontiguous condo units to two LLCs with the same beneficial owners is subject to the bulk sale rate.
#18-4989  7/30/18
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A two-family house with commercial space, but which is primarily residential, is treated as residential for purposes of the RPTT. #18-4991  11/29/18
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The sale of two cooperative apartments that had been used as a single residential dwelling for over 40 years, where the purchasers (with board approval using a proposal obtained from an architect) intend to physically combine the units, should be treated as the sale of a single cooperative apartment subject to the lower tax rate schedule under Administrative Code § 11-2102(b)(1)(B)(i). #16-4977  6/9/16
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The sale of a one-family home with one office, categorized as tax class 1 to reflect that the property is used primarily for residential purposes, and having a building code S1 (primarily one-family with one store or office) consistent with the tax classification, is taxed at a reduced rate of 1.425 percent when calculating the RPTT due upon the conveyance of the property. In the absence of information suggesting the DOF classification of the property as class 1 is incorrect, that classification is controlling for RPTT purposes. #15-4975  5/13/16
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The sale of real property by an LLC wholly owned by an entity exempt from the real property transfer tax (Administrative Code § 11-2016b2), whose sole purpose is to own and hold the real property for the exempt entity, and whose members must act as the exempt entity directs, should be exempt from real property transfer tax. Similarly, transfer of real property to an LLC wholly owned by an entity exempt from the real property transfer tax (Administrative Code § 11-2016b2), whose sole purpose is to own and hold the real property for the exempt entity, and whose members must act as the exempt entity directs, should be exempt from real property transfer tax. #15-4974  5/23/16
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The transfer of two adjacent condominium units that had been physically combined and used as a single apartment for over 50 years, in a single transaction, is treated as the sale of an individual residential condominium unit even though permits for the combination were never filed with the Department of Buildings. #15-4973  9/24/15
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The sale of two cooperative apartment units, physically connected through an internal hallway and used as a single apartment unit for over four decades, is treated as the sale of an individual cooperative apartment subject to the lower rate. #15-4970 10/16/15
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The transaction involving the transfer of air rights should be viewed in its entirety for purposes of the RPTT. The quit claim deeds are not part of a separate transaction but merely a mechanism to confirm and record that the purchaser owns the portion of the building housing the residential condominium units and that the seller owns the commercial condominium unit. The quit claim deeds do not result in a change in beneficial ownership. The consideration for the transfer of the air rights is $15,230,000 plus the value of the commercial unit constructed by the purchaser for the seller, less the $500,000 that the seller contributed towards the construction. #15-4967  11/13/15
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The sale of a single condominium apartment unit along with one or more noncontiguous studio units, the ownership and use of which are substantially restricted under the condominium’s by-laws, should be treated as the sale of an individual condominium apartment subject to the lower tax rate schedule for real property transfer tax provided in Administrative Code § 11-2102(a)(9)(i). #14-4965  6/15/15
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The sale of a single condominium apartment unit along with one or more noncontiguous suite units, the ownership and use of which are substantially restricted under the condominium’s by-laws, should be treated as the sale of an individual condominium apartment subject to the lower tax rate schedule for real property transfer tax provided in Administrative Code § 11-2102(a)(9)(i). #14-4963  6/15/15
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This ruling concerns the applicable RPTT rate for class 1 property with a doctor’s office. #14-4962  5/19/15
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The transfer of two adjacent condominium units by a sponsor, in a single transaction, is treated as the transfer of units combined at the time of sale and subject to tax as the sale of an individual residential condominium unit under Finance Memorandum 00-6REV. The units had never been occupied and were combined before the purchasers’ occupancy.#13-4953.  3/28/14
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A transfer of property to a trust and a withdrawal of an amount of cash equal to the appraised value of that property from the trust, under a power of substitution, is exempt from RPTT as a transfer without consideration. #13-4947.  3/28/14
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Property sold by a tax-exempt entity acting as the receiver of a foundation dissolved for malfeasance is subject to the RPTT.#13-4941.  11/22/13
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The sale of combined cooperative apartments physically connected through an internal vestibule is treated as the sale of an individual cooperative apartment, triggering the lower RPTT rate schedule. #13-4940.  9/3/13
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The exchanges of undivided tenant-in-common interests in property for condominium units representing the same spaces are exempt from the RPTT as transfers without a change in beneficial interest. #13-4938,  8/30/13
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Conveyance of two adjacent residential properties by separate deeds is treated as two conveyances and is subject to the lower RPTT tax rate schedule.  Consideration is not aggregated. #12-4932.  6/6/13
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Subsidy amounts by governmental entities on behalf of non-governmental purchasers of property are subject to tax.  #10-4909  6/03/11
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Payments pursuant to an arrangement characterized as a lease are not subject to the commercial rent tax when the substance of the arrangement is a financing arrangement and not a true lease. #10-4913  5/18/11
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Purchase of a condominium by a mother a year after purchases of condominiums by her sons in the same building is held to be a purchase of an individual residential unit.  10-4915  5/06/11
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A Residential property with a small office is subject to the lower rate.  #10-4914  4/22/11
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A transfer of an economic interest in real property to a charitable organization and a possible transfer of that interest from that organization are not collapsed under the step transaction doctrine. The first transfer was the result of a will executed long before the second transferee was involved. The possible second transfer is the result of unintended defaults on loans and, depending on future events, may never occur. #10-4906  9/29/10
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The transfer of two adjacent condominium units by a sponsor, in a single transaction, is treated as the transfer of units combined at the time of sale and subject to tax as the sale of an individual residential condominium unit. The units had never been occupied, and the sponsor agreed as part of the transaction to undertake construction to physically combine the units before the purchasers’ occupancy. #09-4901  6/25/10
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The sales of a cooperative apartment and a supplemental unit are held to be a sale of an individual cooperative apartment subject to the lower rate schedule. #08-4879  5/13/10
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The reconstitution under the Business Corporation Law of a Mitchell-Lama cooperative corporation that had been formed under the Private Housing Finance Law, results in a conveyance of property that is subject to the New York City real property transfer tax. #094898-021  1/14/10
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The tax rate for one, two, or three-family homes is applicable to the transfer of a building containing two residential units and an eating establishment. The tax classification reflects that the building is used primarily for residential purposes, and there is no information suggesting the classification is incorrect. #09-4899  1/08/10
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The conveyance of a controlling economic interest in property to a taxpayer that meets the criteria of IRC §501(c)(3) is exempt despite the fact that the taxpayer has not yet received its federal exemption. #09-4895-021.  6/11/09
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A two-step conveyance in which property is transferred by a business corporation to its exempt parent and then to a third party is not exempt from tax. #08-4885-021.  2/19/09
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This ruling concerns real property conveyed from two adjoining apartments that the taxpayer intends to combine immediately after obtaining title. #08-4875.  11/26/08
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This ruling concerns the request for an exemption from NYC real property transfer tax on behalf of a church with respect to the transfer of property. 11/26/08
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Real property conveyed from a not-for-profit to a single-member limited liability company in which the not-for-profit is the sole member may retain its real property tax exemption under RPTL § 420-a and will also be exempt from the RPTT. #07-4873. 11/21/07
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Conveyance of legal title to and reversion of legal title from the Trust for Cultural Resources of the City of New York are exempt from the RPTT. #06-4853.  8/30/07
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Conveyance by a husband and wife of each of their 50% interests in two jointly-owned properties to two revocable trusts is exempt as a mere change of form. #06-4863. 3/29/07
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Conveyance of shares in a cooperative apartment from a 501(c)(3) organization to its occupant and the reconveyance of a deed to the same apartment to the 501(c)(3) organization from the occupant solely for the purpose of facilitating conversion to a condominium is exempt from the RPTT. #07-4864.  7/27/07
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Transfer of 98.99% limited partnership interest in a housing project meeting federal charitable guidelines to a New York not-for-profit corporation is exempt from tax. 2/21/07
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Under the real property transfer tax, the transfer of a condominium unit that is required to be used as a hotel room will not qualify for the lower rate applicable to individual residential condominiums. #06-4862.  1/04/08
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In the case of a Mitchell-Lama limited profit housing corporation reconstituting as a business corporation, the transfer of the property to a new corporation in exchange for shares in the new corporation is subject to the RPTT.  The exchange of the shares held by tenant-shareholders for shares in the new business corporation is exempt from the RPTT as a mere change of form.  However, the transfer by tenant-shareholders of their shares in exchange for cash is subject to the RPTT. #06-4851.  11/30/06
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A reduced tax rate of 1.425% for one, two, or three-family homes is applicable to the transfer of a building containing two residential units and a medical office for consideration over $500,000, where the tax classification reflects that the building is used primarily for residential purposes and where there is no information suggesting the classification is incorrect. #06-4845. 3/6/2006
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A deed of property to a nonprofit organization exempt under IRC §501(c)(3) is exempt from tax. #05-4840. 11/10/05
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The transfer of three condominium units combined into a single residence is taxed as a transfer of an individual residential unit despite lack of revised certificate of occupancy, letter of completion, or revised tax lot designation. #05-4831. 6/9/2005
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A non-profit HDF corporation is exempt from transfer tax on transfer to a partnership with for-profit limited partners. The partnership was formed to build low-income housing, and the non-profit 501(c)(3) parent corporation retains control over the project. #04-4828. 2/22/2005
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The assignment of a subscription agreement for a cooperative apartment is taxable where the assignor is a shareholder of the cooperative corporation and where the closing is simultaneous with and contingent upon the closing of the sale of the apartment and granting of a proprietary lease to the assignee by the cooperative corporation. #04-4824. 8/9/2004
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The applicable tax rate for transfer of property by tenants-in-common is based on the separate consideration for each deed, even if a portion of the consideration for each deed is in the form of a single purchase money note. #04-4823. 5/26/2004
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An acquisition of ground lease and buildings from US Army by a joint venture between the US Army and a private developer is taxable to the extent of the interest transferred to the private developer. The value of transferred interest is a factual determination not susceptible to a legal determination. #03-4818. 5/4/2004
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The transfer of a property to a single-member LLC, the sublease of the property to a third party for a lump sum payment, and the re-lease of property to the owner of LLC for payments equal to debt service on lump sum payment constitute a financing transaction and not a true lease. The transaction is not subject to RPTT or CRT. 6/10/2004
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A co-ownership arrangement as financing to comply with Islamic law is not subject to tax. #03-4811. 1/13/2004
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A transfer to new trust with identical terms, except that termination distributions to current beneficiaries are per capita instead of per stirpes, qualifies as mere change except to the extent the future interests would be different if the trust were terminated immediately. The valuation of interests transferred is not susceptible to ruling. #03-4812. 12/26/2003
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A transfer by a bankruptcy trustee for a non-profit entity in Chapter 7 liquidation is not exempt from tax. #03-4808. 11/28/2003
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A transfer by tenants-in-common to an LLC owned by grantors in the same proportions is exempt as a mere change of ownership. #03-4806. 10/15/2003
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This ruling concerns the applicable RPTT rate for class 1 property with a doctor’s office. #03-4805. 6/25/2003
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A conveyance/leaseback with government instrumentality is exempt as a transfer to a dummy entity. #03-4803. 7/11/2003
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A primary unit and a maid's unit sold under separate contracts are treated as a bulk sale in the absence of facts indicating that the sales were separate transactions. #03-4801. 5/23/2003
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This ruling concerns transfers to an "accommodation title holder" in deferred like-kind exchanges under the real property transfer tax. # 02-4795. 3/13/2003
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A purchase and resale financing arrangement under Islamic law is treated as a loan, not a taxable transfer. #02-4790. 4/9/2002
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The creation of an off-balance-sheet finance lease is not subject to RPTT, and payments under the finance lease are not subject to CRT. #01-4789. 2/5/2002
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The transfer of cooperative apartments from a husband and wife holding title jointly to the wife holding title alone pursuant to a divorce is a taxable transfer of 50% of each apartment, even though the wife furnished all of the funds for the purchase of the apartments. #01-4779. 8/9/2001
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When two parties exchange co-op apartments pursuant to contracts that are separate but contingent on each other, the consideration for each apartment conveyed is the fair market value of the apartment received. #01-4775. 6/26/2001
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The distribution of a condominium unit by a limited liability company to one of its members will be exempt from New York City real property transfer tax as a transfer from a mere agent, dummy, straw man or conduit to its principal, where that member will hold title to the unit and will lease the unit to another entity under a finance lease. Because the lease is a financing arrangement and not a true lease, rental payments will not be subject to commercial rent tax. The creation, termination, and exercise of a purchase option under the lease will not be subject to the New York City real property transfer tax if the deed is given solely to secure a debt or to return such security. #00-4773. 4/19/2001
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The distribution of condominium units by a limited liability company to certain of its members will be exempt from New York City real property transfer tax as a transfer from a mere agent, dummy, straw man or conduit to its principal, where each of those members of the LLC will be responsible for the financing and construction of its unit. The LLC's transfer of one unit to a nonprofit entity exempt from federal tax under IRC §501(c)(3) will be exempt as well. #00-4770. 4/19/2001
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The transfer to an irrevocable trust of interest in an encumbered property in return for fixed annuity payments is subject to tax. However, transfer from the trust at the end of its term is not subject to tax. Consideration equals the annuity payments plus the amount of the mortgages on the property. #00-4766. 2/15/2001
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The taxpayer's conveyance of a property to an LLC is exempt from the RPTT by reason of code § 11-2106(b)(8). #00-4765. 8/23/2000
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The taxpayer’s conveyance of a property to an LLC is exempt from the RPTT by reason of code § 11-2106(b)(8). #00-4764. 8/23/2000
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The taxpayer's conveyance of a property to an LLC is exempt from the RPTT by reason of code § 11-2106(b)(8). #00-4763. 8/23/2000
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The taxpayer's conveyance of the leasehold to the LLC is exempt from the RPTT by reason of code § 11-2106(b)(8). #00-4762. 8/23/2000
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The taxpayers contracted to purchase two residential units (together with two nonresidential units) from the sponsor as part of a single transaction. Therefore, the purchase of the primary unit and the suite unit is not the purchase of an individual residential condominium unit and is not eligible for the lower tax rate applicable to the purchase of an individual residential condominium unit. The tax is imposed separately on each deed. #00-4761. 8/23/2000
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When devisees under a will, who are granted half interests in each of several properties, distribute their interests so that each ends up with sole title to specific properties, the transaction is taxable. #00-4757. 7/27/2000
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The transfer of two condominium units that are combined prior to sale is treated as the conveyance of an individual unit. #99-4756. XX/XX/2000
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A not-for-profit housing corporation, whose project will help to redevelop blighted areas of the city, qualifies as charitable and is exempt from tax. #99-4753. 7/99
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Conveyance of property to an LLC where there is no change of beneficial ownership is exempt as mere change in form. #99-4752. 7/99
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Conveyance of property to an LLC where there is no change of beneficial ownership is exempt as mere change in form. #99-4751. 7/99
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Conveyance of property to an LLC where there is no change of beneficial ownership is exempt as mere change in form. #99-4750. 7/99
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Conveyance of property to an LLC where there is no change of beneficial ownership is exempt as mere change in form. 99-4749. 7/99
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Conveyance of property to an LLC where there is no change of beneficial ownership is exempt as mere change in form. #99-4748. 7/99
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Conveyance of property to an LLC where there is no change of beneficial ownership is exempt as mere change in form. #99-4747. 7/99
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The transfer of condominium units by conduit is exempt. #99-4745. 6/29/99
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A 501(c)(2) entity that owns and operates real property for the purpose of paying profits to its exempt parent is not exempt. #99-4744. 3/23/99
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Conveyance to a partnership to confirm title that has already vested is exempt. #99-4741. 4/13/99
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Conveyance of property to a wholly owned LLC is exempt as mere change of form. #99-4740. 4/19/1999
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Transfers by a partnership of two parcels of land to two newly formed LLCs owned in the same percentage by the partners of the partnership are exempt as mere change of form. #98-4737 12/21/1998
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The transfer of a residential condominium and parking space are not aggregated, and the lower rate schedule is applied to the transfer of the residential condominium. #98-4736. 3/23/1999
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A transfer by joint tenants to a wholly owned corporation is exempt as mere change of form. #96-4685. 11/12/1996
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On sale by a corporation of two adjacent condominiums by separate deed, the rate for individual residential apartments does not apply, but consideration is not aggregated. #96-4682. 10/17/1996
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Transfers by a taxpayer to a trust acting as receiver are not subject to tax, but transfers by the trust to third parties are subject to tax. #96-4675. 10/25/1996
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Redacted Letter Rulings