As a Real Estate Broker in Queen, New York I’ve helped numerous families and first-time home buyers purchase a co-op. This type of real estate transaction requires a lot of attention to detail. In the video above I break down one of those details.

What is a Flip Tax?

A flip tax is a fee that is associated with the selling of a cooperative (co-op) unit. It is a fee charged by the co-op board upon the sale of a property. It can range in price from co-op to co-op. It could be a percentage of your profit or a flat fee per share. The fee is typically paid by the seller of the co-op. Not every co-op board requires a flip tax.

Pro’s of a Flip Tax:

Keeps building’s reserves high, which allows for a steady maintenance fee.

Cons of a Flip Tax:

It has to be paid and could eat up your profits.

When purchasing a co-op with a large flip tax it is wise to evaluate how long you plan on keeping this investment. Does the building allow unlimited sublet? A large flip tax can really eat into your profit if you are planning on using your profits to upsize in the future.