Learn about transfer taxes in Westchester County: A quick guide

What is the type of transfer tax?

Transfer taxes usually vary according to local regulations, but can usually be divided into three types according to the state’s status: state, city, and county. Here is a brief overview of how West County works.

National transfer tax

In New York, every $500 home value is $2.00 per documentary transfer tax. However, depending on your location in New York, other taxes may apply.

County transfer tax

In Westchester County, the county transfer rate is $2.00 per $500.

Other transfer fees

In addition to the transfer tax, additional fees need to be considered, such as costs for homeowners’ associations or other local neighborhood organizations. As these may vary depending on location, it is recommended to consult a professional.

If you sell your home without a real estate agent, seeking professional advice may help provide details of the process and provide a clearer understanding of the pros and cons of selling a home without a real estate agent.

Is transfer tax deductible?

Transfer tax is not deductible from your income tax return, but it may still offer some tax advantages when selling your home. While you can’t take them as direct deductions, you may be able to reduce your capital gains tax liability. Capital gains are the profits brought about by selling a home or other assets, which are subject to federal taxes.

The IRS allows sellers to classify transfer taxes as cost of sales, which can be deducted from the final selling price of the home when calculating capital gains. Lowering reported profits from sales may reduce taxes on arrears. Homeowners planning to sell should consult with a tax expert to see how this applies to their situation.

Transfer tax exemption

Some sellers in Westchester County may qualify for tax exemption. Here are a few examples:

• Transactions involving any international organization that is a member of the United Nations or United States.
• Transfer nonprofit organizations established for religious, charitable or educational purposes, or to prevent cruel acts against children or animals.
• Transfers to any government entity are exempt from taxes.
• Transfers are only as a guarantee for debts or debts/deeds/instruments that return only such margin.
• Transfer from broker, dummy, scarecrow or catheter to its principal and vice versa.
• Transfers made by the executor designated in the will, although the deeds of the executor in connection with the sale of real estate are taxable.
• As long as the ownership of beneficial ownership or transfer of identity or form of the organization has not changed.

Estimated transfer tax on home sales

To accurately estimate the potential benefits of selling a Westchester County home, consider using Homelight’s net income calculator. This tool specifies essential costs such as closing fees, transfer taxes, agency fees, and any updates you make to the property, thus estimating exactly what you get from the sale.

Additionally, working with top real estate agents early in the process can provide valuable insights into your situation. Homelight can connect you with the top Westchester County Agents today to give you peace of mind during the tough process.

Editor’s Note: This article is for educational purposes only and does not constitute legal or financial advice. Links and mentions to Westchester County Tax Services or attorneys should not be made.

Title image source: (cboswell/poadephotos)