- July 16, 1996
- All New York Branch Managers, Counsel and Agents
- New York State Real Property Transfer Gains Tax Repealed
Pursuant to Chapter 309 of the Laws of 1996 (signed into law by Governor Pataki on July 13, 1996), Article 31-B of the Tax Law, more commonly referred to as the "Gains Tax" or "Cuomo Tax", was repealed in its entirety. As a result, transfers occurring on or after June 15, 1996 will not be subject to a tax on the gain derived from real property transfers.
The repeal should be a breath of fresh air for the real estate industry in New York State. It would appear that, at least initially, there should be an increase in commercial property transfers. Many property owners who have been anticipating legislative action on the gains tax issue, may now feel that the time is right to market their property.
In any event, the difficulty experienced by man title industry representatives in dealing with gains tax hurdles, ranging from pre-transfer audit filings to the timely delivery of tentative assessments at closing and the severity of the interest and penalties for late payment of the tax has come to an end. However, please be aware that Article 31-B of the Tax Law and the regulations thereto, as well as civil and criminal penalties applicable to it, continue in effect with respect to all taxes, interest and penalties incurred on transfers which took place prior to 6/15/96.
There will almost certainly be revisions to the TP-584 Combined Tax Affidavit and Return. Until such time as a revised form is created, it is suggested that you continue to use existing TP-584 forms. However, in those cases where a transfer occurs on or after June 15, 1996, the section dealing with the Grains Tax should not have to be completed. As soon as any new information is obtained from the State in this regard, we will advise you accordingly.
In the interim, if you have any questions, please contact Company Counsel.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.