Thinking about selling or buying a co-op in Rego Park and keep hearing about a “flip tax”? You are not alone. This line item surprises many sellers at the closing table and can change how a buyer structures an offer. With a little clarity up front, you can plan your numbers, avoid last‑minute stress, and keep your deal on track. In this guide, you will learn what a flip tax is, how buildings in Rego Park typically calculate it, who usually pays, and the practical steps to estimate and negotiate it with confidence. Let’s dive in.

What a flip tax is

A flip tax is a charge that a cooperative corporation may collect when shares tied to an apartment are transferred. It is paid to the co-op, not to the city or state. Think of it as a building transfer fee set by the board and governed by the building’s documents.

A flip tax helps fund building operations or reserves. Some boards also use it to discourage quick resales. The exact rules come from the proprietary lease, by-laws, or board resolutions authorized under those documents.

Not a government tax

A flip tax is different from New York City or New York State transfer taxes. Those are government levies on certain property transfers. A co-op flip tax is a building charge. Co-op closings can also include broker commissions, attorney fees, and routine adjustments. Each item should appear as a separate line on the closing statement.

How buildings authorize it

Co-ops create flip taxes through their governing documents. A board or shareholder vote, as required by those documents, authorizes the charge and sets how it is calculated. Changing the amount or who pays typically follows the amendment rules in the by-laws. Written terms control, so always confirm the current language before you price or make an offer.

Common ways it is calculated

The formula varies by building. The exact wording in your proprietary lease or by-laws controls the trigger and the math.

Per-share formula

• Calculation: a dollar amount per allocated share times the number of shares for the unit.
• What it means: predictable once you know the share count. Often seen in older co-ops.

Percentage of sale price

• Calculation: a set percentage of the sales price.
• What it means: scales with price and is easy to model when you set a list price.

Flat fee

• Calculation: a fixed dollar amount regardless of price or shares.
• What it means: simple and predictable for any sale price.

Percentage of net profit

• Calculation: a percentage of the seller’s gain as defined by the building.
• What it means: less common because it requires prior purchase data and clear rules for allowable deductions.

Mixed or capped formulas

Some buildings combine methods, such as per-share with a cap, or a percentage with a minimum fee. Minimums, maximums, and special exceptions must be written in the building documents.

Who usually pays in Rego Park

Many Queens co-ops expect the seller to pay the flip tax at closing. That said, responsibility is negotiable unless the governing documents say otherwise. Some buildings state the seller must pay. Others are silent and allow buyer and seller to negotiate. Because practice can vary by building vintage and management style in Rego Park, do not assume. Confirm the rule in writing.

Seller planning: estimate your net

Before you set a list price, confirm the formula and who pays.

• Ask your attorney or managing agent for the proprietary lease, by-laws, and any amendments that define the flip tax.
• Request an estoppel or payoff letter from management that states the amount and payee.
• Build a conservative net sheet: start with expected sale price, then subtract the flip tax, broker commissions, attorney fees, mortgage payoff, and other closing costs.
• If the flip tax is a percent of price, model a range of sale prices so you see how your net changes.
• Decide your pricing approach: list slightly higher to absorb the flip tax, or keep the list price competitive and accept it as a closing cost.

Buyer planning: shape a strong offer

If a flip tax applies, it affects the seller’s bottom line and can shape the negotiation.

• Ask early if there is a flip tax, which formula applies, and who pays per the documents.
• If the seller must pay, your offer can reflect that cost indirectly, since it impacts their net.
• If you are asked to pay or split the charge, confirm the amount and put clear language in the offer and contract about responsibility and timing of payment.
• Coordinate with your lender and attorney so there are no surprises at board approval or closing.

Closing logistics: how payment works

Most co-ops collect the flip tax at closing. The seller’s or buyer’s attorney shows the line item on the closing statements. Management or the co-op attorney issues a transfer approval or payoff letter stating the amount due, and funds are disbursed to the co-op. In some cases, funds are held in escrow and released at closing. Ask for the payoff letter early so your final numbers are accurate.

Rego Park specifics to keep in mind

Rego Park has a mix of prewar and postwar co-ops. Many have established flip taxes, but not all. Share allocations and legacy rules can differ from building to building. Always verify the actual formula and payer for your specific address. Local custom is helpful, but the written documents control.

Due diligence checklist

Sellers: do this early

• Obtain the proprietary lease, by-laws, amendments, and any board resolutions about the flip tax.
• Request an estoppel or payoff letter that states the amount and the payee.
• Confirm any exemptions that might apply, such as transfers by inheritance or to certain family members, if relevant to your case.
• Ask whether any change to the flip tax is pending and the effective date.
• Review your share count if the formula uses per-share math.

Buyers: get clarity before you bid

• Ask if a flip tax is in effect and for the exact formula, including any minimums or caps.
• Confirm who pays per the documents and typical practice in that building.
• If responsibility is negotiable, state it clearly in your offer and contract.
• Request evidence of the amount, such as a management letter, during attorney review.

Common exemptions

Some buildings carve out exemptions for transfers between immediate family members, by inheritance, to the co-op itself, or to certain affiliates. The list of exemptions varies widely and must appear in the governing documents. If an exemption could apply, verify it with the documents and your attorney.

Red flags to avoid

• Ambiguous wording in the documents about whether the base is sale price or net proceeds.
• No estoppel or payoff letter requested until the eve of closing.
• Building practice that conflicts with the written documents. The written terms control.
• Sudden changes to the flip tax shortly before your sale. Confirm the effective date and whether any change is retroactive.

Quick math examples (hypothetical)

These examples are for illustration only. Verify your building’s actual terms.

• Per-share example: $20 per share with 150 shares equals a $3,000 flip tax.
• Percentage of price example: 1.5 percent on a $500,000 sale equals $7,500.
• Flat fee example: $2,500 regardless of price equals $2,500.

How to talk about it in negotiations

• Be direct and factual. State the rule, the formula, and the dollar impact.
• If you are a seller, decide whether to offer a credit, split the charge, or stand firm based on market demand.
• If you are a buyer, propose a clean structure that clarifies who pays and adjusts price accordingly. Simple, transparent terms help board review and keep timelines steady.

The bottom line for Rego Park co-ops

A flip tax is a building charge, not a government tax. The formula and who pays are building-specific and must be confirmed in writing. If you get the documents early, model your numbers, and write clear contract terms, you can avoid surprises and keep your sale or purchase on track. If you want a neighborhood-first advisor to help you navigate local co-op rules and board approvals, reach out to Alan Mann for practical, Queens-focused guidance.

FAQs

What is a co-op flip tax in Rego Park?

• A flip tax is a building-imposed transfer fee collected by the co-op when shares tied to an apartment are sold, paid to the co-op and defined by the building’s documents.

How do Rego Park co-ops calculate a flip tax?

• Common methods include per-share, a percentage of the sale price, a flat fee, or a percentage of profit, with the exact formula set in the proprietary lease or by-laws.

Who usually pays the flip tax in Queens?

• Many buildings expect the seller to pay, but responsibility is negotiable unless the governing documents specify otherwise, so confirm it in writing.

Is a flip tax the same as NYC transfer tax?

• No, a flip tax is a co-op charge paid to the building, while NYC and NYS transfer taxes are government levies that are separate line items.

What documents confirm a flip tax amount?

• The proprietary lease, by-laws, and amendments define it, and an estoppel or payoff letter from management states the amount and payee for your closing.

Are there flip tax exemptions for family transfers?

• Many buildings list exemptions for certain intra-family or inheritance transfers, but the exact rules vary and must be verified in the building documents.

When is the flip tax collected at closing?

• The co-op typically requires payment at closing, shown on the closing statement, with amounts verified by a management or attorney payoff letter.