New York State Tax Law Section 1404(a) has been amended effective as of July 1, 2021. This amendment applies to transactions dated on or after July 1, 2021 with the exception of conveyances made pursuant to binding written contracts entered into on or before April 1, 2021, provided that the date of execution of such contract is confirmed by independent evidence, such as the recording of the contract, payment of a deposit or other facts and circumstances as determined by the commissioner of taxation and finance.
The requirement to “gross up” the taxable consideration has now been eliminated when calculating New York State Real Estate Transfer Tax and Mansion Taxes on the conveyances of a one to three family residential dwelling, an individual residential condominium and an individual residential cooperative unit, or interests therein, when the contract of sale places the burden of such transfer tax upon the grantee.
Grossing up for purposes of calculating New York City RPT tax or other taxing municipalities are not subject to this amendment, and presumably shall continue.
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