Owning a large apartment in New York City has historically been a prudent investment, and the inventory of multi-bedroom apartments has, over the years become woefully insufficient for the demand. As an increasingly common solution to the space problem, prospective purchasers often buy adjacent condominium units from developers, and combine them into a single unit either before or after their purchase. Ideally, buyers will convince sponsors to accept their designs so that the combination of multiple units is completed prior to closing. Such customizations often come at a price. Building the home of one’s dreams through a sponsor is usually expensive, but worth it to most buyers in order to simply move into their finished new home upon closing.
However, many sponsors refuse to combine units in advance of initial closings, for fear of causing delays. Sponsors usually prefer to deliver units as soon as possible in order to close, collect the sale price, and satisfy their construction loans. Accordingly, most buyers of multiple units purchase their units separately, which often leads to higher rates of taxation.
Imposing a Transfer Tax
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