What Is a Flip Tax in Hartsdale Co‑ops?

Have you heard the term “flip tax” while looking at a Hartsdale co-op and wondered what it really means for your bottom line? You are not alone. This fee can change your net proceeds as a seller and your cash-to-close as a buyer. In this guide, you will learn what a flip tax is, how buildings in Westchester calculate it, who usually pays, and the exact steps to confirm your number before you sign. Let’s dive in.

Flip tax basics in Hartsdale

A flip tax is a fee a co-op corporation charges when shares tied to a unit are transferred. It is not a government tax. It is a building-level policy set in the proprietary lease, bylaws, or a board resolution. In Westchester, each co-op chooses its own method and rate.

Boards use flip taxes to fund reserves, support capital projects, offset turnover costs, and reduce pressure on monthly maintenance. During a sale, the managing agent or co-op attorney typically confirms the exact amount on the closing statement or in a board authorization letter. Keep in mind that state, county, and municipal transfer taxes are separate line items. Do not confuse them with a flip tax paid to the building.

How buildings calculate the fee

Each co-op sets its own formula. Here are the most common methods you will see in Hartsdale and how to estimate them.

Percentage of sale price

• Formula: Sale price × rate
• Typical range: commonly 1% to 3% depending on building
• Example: $400,000 sale at 1.5% → $6,000

Per-share fee

• Formula: Dollar amount per proprietary share × number of shares for the unit
• Example: $10 per share × 2,000 shares → $20,000

Flat fee per unit

• Formula: A fixed dollar amount regardless of price
• Example: $5,000 flat fee

Percentage of net gain

• Formula: (Sale price − your original purchase price or cost basis) × rate
• Example: Bought at $200,000, sold at $350,000, gain $150,000 at 2% → $3,000

Multiple of monthly maintenance

• Formula: Monthly maintenance × number of months
• Example: $1,200 per month × 12 months → $14,400

Hybrid or sliding scale

• Examples: The lesser of a percentage of price or a per-share amount, or a capped fee.

Actual rules vary by building. Ask for the proprietary lease, bylaws, and the latest board resolution to confirm the current formula before you list or make an offer.

Who pays and when

In many Westchester co-ops, the seller pays the flip tax at closing. Some buildings place the obligation on the buyer, and in a softer market the parties may negotiate a split. The definitive answer lives in the governing documents and the contract of sale. The co-op usually collects the fee by certified check or wire at closing. Your closing attorney or settlement agent will handle it per the building’s instructions.

What it means for your budget

For sellers: estimate net proceeds

Run your numbers early so you can price and negotiate with confidence. A simple check looks like this:

• Sale price
• Minus broker commissions
• Minus mortgage payoff(s)
• Minus flip tax
• Minus applicable transfer taxes and recording fees
• Minus attorney fees and prorations

If your building uses a percentage of price or a per-share fee, create a few scenarios so you know your minimum and maximum likely outcomes. If the fee is large, you may try to offset it by negotiating price or who pays, but confirm building rules and market conditions.

For buyers: plan cash-to-close

If the buyer pays the flip tax, add it to your cash-to-close alongside down payment, closing costs, and reserves. Many lenders will not finance a building transfer fee, so plan to bring those funds in cash. Ask for written confirmation of the amount and timing before you sign.

Exemptions and special cases

Many co-ops allow exemptions or special rules. These may include transfers between immediate family, an estate to a beneficiary, certain corporate internal transfers, or first sales after a conversion. Policies are building-specific. You will find them in the lease, bylaws, or a board resolution.

Your Hartsdale checklist

Get clarity upfront. Use this list to avoid surprises.

• Request documents:

  • Proprietary lease and bylaws with the flip tax clause
  • Latest board resolution or schedule for the flip tax
  • Certificate of shares or share allocation for the unit
  • Written amount or formula from the managing agent or co-op attorney
  • Estoppel or authorization letter, and, if possible, a sample closing statement

• Ask specific questions:

  • Is there a flip tax, and what is the exact formula and rate today?
  • Who pays under the governing documents?
  • Are there exemptions, waivers, caps, or sliding scales?
  • How and when is the fee collected at closing? Any special wiring instructions?
  • Will the amount appear on the board authorization or closing statement?

• For sellers: sharpen your net

  • Model scenarios with different prices and payer splits
  • Fold the flip tax into your pricing and negotiation strategy

• For buyers: sharpen your cash

  • Confirm whether you or the seller pays
  • Add the flip tax to your cash-to-close plan if you are responsible
  • Ask your lender if any part can be financed

• Legal and tax review:

  • Have your real estate attorney review the lease, bylaws, and contract
  • Ask your tax advisor how the flip tax will be treated on your return

• Negotiation tips:

  • The building sets the fee, but the parties can often negotiate who pays
  • If the fee is high, consider price adjustments or credits to balance the deal
  • Put any agreement about the flip tax in writing in the contract

Local notes for Westchester

Hartsdale sits in Greenburgh, where you will find a range of co-op communities and conversions. Policies can vary more widely than in the city, so early document requests are especially important. Also remember that New York State and Westchester County transfer taxes and recording fees are separate from any building flip tax. In lower price ranges, a per-share or flat co-op fee can represent a meaningful share of the sale price. For higher price points, percentage-based fees may stand out more. In both cases, confirm the exact rule in your building and plan accordingly.

Smart examples to anchor your plan

Here are quick “what if” sketches to help you think through impact:

• Example A, seller pays a percentage: You list at $400,000 and your building charges 1.5% of price. Expected flip tax is $6,000. Add that to commissions, payoffs, and transfer taxes to estimate your net.
• Example B, buyer pays per share: You are buying a unit with 2,000 shares and the flip tax is $10 per share. Your cash-to-close needs to include an extra $20,000.
• Example C, profit-based: You bought at $200,000 and will sell at $350,000. The flip tax is 2% of gain, or $3,000. If the buyer proposes to split it, your share would be $1,500, subject to contract.

These are only illustrations. Always confirm your building’s exact method and rate.

Work with a local guide

Whether you are selling a co-op to downsize or buying your first place in Hartsdale, clear answers help you move forward with confidence. If you want help confirming your building’s flip tax, modeling your net, or planning cash-to-close, reach out. We pair local expertise with calm, concierge-level support so you can make smart decisions at each step.

Ready to talk through your numbers or Request a Home Valuation? Connect with Pat Palumbo for a thoughtful, no-pressure consultation.

FAQs

What is a flip tax in a Hartsdale co-op?

• It is a building-imposed fee on the transfer of co-op shares, set by the co-op’s governing documents and paid to the co-op, not the government.

How do Hartsdale co-ops calculate a flip tax?

• Common methods include a percentage of sale price, a per-share fee, a flat fee, a percentage of gain, a multiple of monthly maintenance, or a hybrid formula.

Who usually pays the co-op flip tax in Westchester?

• Many buildings place the obligation on the seller, but some require the buyer to pay, and the parties can often negotiate in the contract.

When is the co-op flip tax collected at closing?

• The co-op typically collects the fee at closing by certified check or wire, and the amount appears on the board authorization or closing statement.

Are there exemptions to co-op flip taxes in Hartsdale?

• Some buildings exempt transfers such as between immediate family, estate transfers, or specific internal corporate transfers, as stated in their documents.

Is a flip tax the same as New York transfer tax?

• No. A flip tax is a private building fee paid to the co-op, while state, county, and municipal transfer taxes are separate government charges.

How does a flip tax affect my taxes as a seller?

• A flip tax paid by the seller is generally treated as a selling expense that can reduce capital gain; consult your tax advisor for your specific situation.