HTML Preview Property Transfer Request Letter page number 1.
June 25, 2010
RE: Ruling Request
Real Property Transfer Tax
FLR: 094901-021
Dear:
This letter responds to your request, dated October 13, 2009, on behalf of (the “Taxpayer”), for a ruling that
the transfer of two adjacent condominium units to be used as one unit should be treated as the transfer of an
individual residential condominium unit for purposes of the New York City Real Property Transfer Tax (the
“RPTT”). This office received additional information concerning this request on February 3 and 23, 2010.
FACTS
The facts presented are as follows:
The Property. This ruling addresses the Taxpayer’s acquisition of two adjacent residential
condominium units, (“Unit 1”) and (“Unit 2”) at the (the “Condominium”) located at. As described below,
Units 1 and 2 have since been combined into one unit (the “Property”). The Taxpayer purchased the
Property as a residence for a couple, (“H”) and (“W”).
The Taxpayer is an LLC owned by a trust for the benefit of W and the son of W and H. The Taxpayer was
formed for estate planning purposes. H and W are tenants of the Property, and the Taxpayer is the landlord.
Purchase and renovation
. On, the Taxpayer entered into contracts to purchase Unit 1 and Unit 2 (the
“Purchase Agreements”) from the sponsor of the Condominium (the “Sponsor”). The Condominium was in
a newly-constructed building, and the Taxpayer entered into the Purchase Agreements before the building
was complete. The Condominium’s offering plan offered the space as two units, and, while they were
marketed and shown as separate units, they had never been occupied as separate units. H and W were only
interested in the space as one larger unit. Taxpayer closed on both units on. The purchase price on each unit
separately exceeded $500,000, but was less than $1 million.
As an integral part of the purchase, the Sponsor agreed to combine Units 1 and 2 into one unit according to
detailed specifications set out in the Purchase Agreements. The work to be done included taking down walls
between the units, removing and replacing the floor in one unit to match the other unit, removing the kitchen
in one unit, and performing other work, such as electrical and plumbing alterations. The construction work
was financed through an Escrow Agreement, , betw
As an integral part of the purchase, the Sponsor agreed to combine Units 1 and 2 into one unit according to
detailed specifications set out in the Purchase Agreements. The work to be done included taking down walls
between the units, removing and replacing the floor in one unit to match the other unit, removing the kitchen
in one unit, and performing other work, such as electrical and plumbing alterations. The construction work
was financed through an Escrow Agreement, , between the Sponsor and H and W. Under the Escrow
. On, the Taxpayer entered into contracts to purchase Unit 1 and Unit 2 (the
“Purchase Agreements”) from the sponsor of the Condominium (the “Sponsor”). The Condominium was in
a newly-constructed building, and the Taxpayer entered into the Purchase Agreements before the building
was complete. The Condominium’s offering plan offered the space as two units, and, while they were
marketed and shown as separate units, they had never been occupied as separate units. H and W were only
interested in the space as one larger unit. Taxpayer closed on both units on. The purchase price on each unit
separately exceeded $500,000, but was less than $1 million.