Southbridge Towers Cooperatives – Estimated Seller Closing Costs
Please contact me anytime for more information regarding the SBT Closing process and costs associated with the sale of your SBT Cooperative.
Please see below for an example of Closing Cost deductions.
SBT Flip Tax 28% of Gross Sale Price
Broker’s Commission 5% of Gross Sale Price
NYC Transfer Tax Up to $500,000 = 1%
Over $500,000 = 1.425%
NYS Transfer Tax 0.4% of Gross Sale Price
Stock Transfer Tax $0.05 Per Share
Seller’s Attorney $2,000 – $2,500
SBT Attorney Escrow Fee $700.00
NYC Administrative Fee (Non-Deed Transfer) $100.00
UCC-3 Filing Fee $100.00
Residential Equalization Fee $75.00
*Estate Document Review Fee $150.00
*Power of Attorney Review Fee $100.00
*Move-Out Deposit $500.00
Estimated Capital Gains Tax Case by Case
* If Applicable
1-Bedroom | $700,000
Broker’s Commission – 5% of Gross Sale Price
$700,000 X 5% = $35,000
SBT Flip Tax – 28% of Gross Sale Price
$700,000 X 28% = $196,000
NYC Transfer Tax – Over $500,000 = 1.425%
$700,000 X 1.425% = $9,975
NYS Transfer Tax – $2.00 per $500.00 of Gross Sale Price
$700,000 X 0.4% = $2,800
Stock Transfer Tax – $0.05 Per Share
26.25 Shares X $0.05 = $1.31
NYC Administrative Fee = $100
Seller’s Attorney = $2,500
SBT Attorney Escrow Check = $700
UCC-3 Filing Fee = $100
Equalization Fee = $75
TOTAL DEDUCTIONS = $247,251
TOTAL PROFIT: $700,000 – $247,251 = $452,749
(*Example does not include Capital Gains)
Q. What’s the Deal with the Flip Tax? (Transfer Fee)
A. The Tenant-Shareholder shall pay to the Apartment Corporation a Transfer Fee (or Flip Tax) in an amount equal to twenty eight percent (28%) of the gross sales proceeds in the event of a sale or twenty eight percent (28%) of the fair market value of the Apartment as determined by an appraisal made by an independent MAI appraiser selected by the Board of Directors, in the event of a gift transfer in connection with the first transfer or sale of the shares of stock allocated and Proprietary Lease appurtenant to a particular Apartment in the building (each an “Initial Sale”) and equal to two and one half percent (2.5%) of the gross sales proceeds in the event of a sale or two and one half percent (2.5%) of the fair market value of the Apartment as determined by an appraisal made by an independent MAI appraiser selected by the Board of Directors, in the event of a gift transfer in connection with sales or transfers other than the first sale or gift transfer of the shares of stock allocated and Proprietary Lease appurtenant to a particular Apartment (each a “Subsequent Sale”).
Initial Sales (First Sale Only) – 28%
Subsequent Sales (All Sales after the First Sale) – 2.5%
(The 28% Transfer Fee only applies to the original owner selling the apartment for the first time)
Q. What are the Annual Mortgage Interest & Real Estate Tax Deductions?
A. For the year ending December 31st, 2017 –
% of Shares Apt Size Mortgage Interest Real Estate Tax
16.25 0-BR $229.19 $2,046.48
19.50 0-BR w/ Balcony $275.02 $2,455.77
22.75 1-BR $320.86 $2,865.07
26.25 1-BR w/ Balcony $370.22 $3,305.84
29.25 2-BR $412.53 $3,683.66
32.50 2-BR w/ Balcony $458.37 $4,092.95
39.00 3-BR $550.05 $4,911.54
42.00 3-BR w/ Balcony $592.36 $5,289.35
*Present and past stockholders who were not stockholders of the Corporation for the entire year of 2017 are entitled to a proportionate share of the deductions for the period of their ownership.
Q. Can I leave the shares allocated to my apartment in my will to anyone who I wish?
A. There are very specific guidelines outlined in the Cooperative Offering Plan that you should be aware of –
1) Subject to Board Approval and the Apartment Corporation’s right of first refusal, you may seek to leave in your will the shares allocated to your apartment to anyone you choose. There is no guarantee that the Board will approve the proposed transfer. (Page 4, Number 1 at the bottom of the page in the Cooperative Offering Plan)
2) Except for transfers between a participating shareholder and his/her spouse or domestic partner, or to an adult child 18 years or older) who has been living in the apartment for at least 2 consecutive years, a transfer fee (flip fee or flip tax) 28% will be due at the time of the transfer (Page 17, middle of the page).
In the event the shares associated with you apartment are left to a grandchild or any other person named in the will, the board can reject occupancy! The heir will always keep his/her financial interest in the apartment and would be able to sell the apartment (Subject to approval by the Apartment Corporation and the Apartment Corporation’s right of first refusal) and keep the proceeds of the sale after paying the Transfer / Flip Fee and any additional costs of selling.