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A New Tax For Coops May Be Just Around The Corner

The New York State Legislature was considering legislation that would have added the equivalent of a mortgage recording tax on the filing of a UCC-1 Financing Statement in connection with a Coop loan secured by cooperative shares. It appears that they have withdrawn this proposed change to the law at this time. So at least for now purchasers of coops who finance their purchase will not have to pay this additional closing cost that those who buy a condo or home must pay. This mortgage tax in NYC is 1.8% of the loan amount. This is one of the main reasons closing costs for purchasers of houses and condos are so high.

Next year may be the year they pass this bill to impose this “mortgage tax” on coop loans. In my opinion, it is only a matter of time before our NY government sticks out its greedy paws to capitalize on this potential source of additional  revenue. When this happens a very important financial advantage of purchasing a coop will disappear.

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