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New York Insider Tips – August 2015

Foreigners may be subject to additional taxes when selling property. Capital gains rates can be double those for citizens. The State withholds additional proceeds, and 10% of gains are withheld by the IRS at closing. Not setting up a savvy ownership structure can result in substantial estate taxes as well. Consult your CPA & attorney.

Over 95% of NYC co-ops carry an underlying mortgage, allowing owners to deduct a % of maintenance payments on personal returns, if eligable. The % of maintenance that is tax deductible changes annually, and is based on the portion of the building’s budget allocated to interest on mortgage and property taxes.

Developers building rental buildings are able to take out a special loan called a mini-perm. This loan provides financing to construct a property and build out its interiors, like a construction loan, and then morphs into a bridge/investment property loan that is paid off through rents obtained once tenants finally occupy all of the apartments.

Builders, developers, architects, engineers, and property owners may request permission from the city to divide one lot of land into two or more lots. This is called an apportionment. Two or more lots may also be combined into one larger lot. This is called a merger. Approval depends on tax and zoning rules.

New condo developers must give purchasers 30 days notice of a closing date. By then, the developer needs to have secured offering plan approval, produced a habitable unit for final inspection and obtained a temporary certificate of occupancy. Most common areas do not need to be completed.