A growing number of co-ops are considering creating or expanding flip taxes as they struggle to replenish reserve accounts depleted by rising costs.
A survey commissioned by Habitat magazine found that close to two-thirds of responding co-op boards already have in place what’s colloquially called a flip tax — formally, a “transfer fee.”
Of the 186 co-op boards responding to the survey, more than 129 charge some kind of transfer fee or administrative fee paid by the seller of an apartment when the unit is sold.
“A couple dozen of our buildings may be looking at the issue,” says Dan Wurtzel, president of Cooper Square Realty, which manages 400 properties.
Once a co-op board decides to consider a flip tax, there seems to be broad agreement about what type to institute. “Two percent of the total sales price of an apartment seems to be the number that everybody likes,” according to property manager Gerard J. Picaso.
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