New Proposed Bill Would Impose a New Tax to Discourage House Flipping in New York City

The proposed “End Toxic Home Flipping Act” (NY A1023) bill intends to discourage the quick reselling residential properties for profit in New York City. The bill would tax the transfer of one to three-unit residential properties if sold within two years of the previous purchase.

It’s important to note that the bill’s current version includes specific exemptions. For instance, it does not apply to residential properties acquired through a deed in lieu of foreclosure or those secured by a mortgage and conveyed to a mortgagee or an affiliate agent following a foreclosure sale.

If the bill is enacted, the tax rates would be structured as follows: 65% of the difference between the property’s acquisition price and the ‘flipped’ sale price if sold within a year, and 50% of the difference if sold between one and two years.

This tax disincentivizes short-term investor’s quick flips, potentially making them far less profitable while creating a stable housing market with more opportunities for first-time homebuyers.