In Washington DC we have many Co-operatives. Co-ops are not found all over the country; just mostly in cities like New York and Washington DC.
One of the Major Benefits about Co-ops have been the fact that Buyers and Sellers have not had to pay the Washington DC Transfer or Recordation Tax.
This has resulted in significant savings for both sides of a Co-op transaction and helped to make co-ops more attractive to buyers; many of whom are cash-strapped 1st Time Home Buyers.
You see in a Co-op; you are not actually 'transferring' or 'recording' the title of the property; because in a co-op there is no Title. You are buying shares of a corporation. (SEE COOPS for more details).
However; a NEW DC LAW; starting October 1, 2009: mandates these Transfer and Recordation Taxes for CO-OP Units. This is HUGE!
For Sales under $400,000 the tax is 1.1% for sales $400,000 and above the tax is 1.45%
Example:
A co-op selling for $350,000 is taxed at $3850 - to BOTH Buyer AND Seller. A co-op selling for $450,000 would be taxed at $6525 for BOTH Buyer AND Seller.
This is HUGE and I am sure it's all to try and increase the tax base to fight a slower economy.
Contact James Downing of the Downing Real Estate Group, if you are selling, buying or have questions! Office: 202-362-5800 Cell: 703.244.3971 Licensed in Washington DC, Virginia & Maryland. Coldwell Banker Residential Brokerage - Chevy Chase
5028 Wisconsin Ave NW Suite 100 * Washington DC 20016
