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FeedThe Exit Tax Requirement for Home Sellers in Yonkers
Selling your house usually means—finally!—getting some money out of it. But, in Yonkers, be ready for one last payment.
If you’re planning to sell a house in Yonkers, finding a buyer won’t be the only hurdle you’ll encounter. The city levies a transfer tax, aka an exit tax, which is paid by the seller of the property.
“It’s pretty straightforward: you sell your house, you pay Yonkers one point five percent” of the closing cost, says Eric Stein, principal broker of RE/MAX Distinguished Homes & Properties in Bronxville. Fortunately, Yonkers is only one of two cities in Westchester that imposes this tax. The other is Mount Vernon, which charges 1 percent on any sale over $100,000.
Still, it’s another hurdle when selling your house, and sometimes a steep one. If a house is $500,000, the sellers would owe $7,500 for the tax. If they’re getting $10,000 upfront, they’re walking away with close to nothing. “Sometimes, they even have to come to the table with money,” Stein says. “It’s just another obstacle.”
And, if you’re looking for a way out of the tax, tough luck. There’s no deduction for it. Also, although it’s an exit tax, you have to pay it even if you’re staying in Yonkers. “People are complaining that they’re selling a house in Yonkers and buying another house in Yonkers—they’re not exiting—and pay anyway,” reports Jeffrey Landsman, associate broker at Better Homes & Gardens Rand Realty in Yonkers. The only way to circumvent the tax is to try and strike a deal with the buyers for them to pay instead. “I have seen this in developments,” says Stein, but he admits it’s a rare occurrence.
The tax has been changed a few times over the last decade, and, luckily, it’s only half what it was a decade ago. “I’ve been doing this eleven years, and, when I first started, the tax was at three percent,” Landsman says. “It was lowered from three to one percent because no one was happy about it, but then the city needed more money so it was raised.”
And, as long as times are tough, the unpopular tax will probably stick around. “I doubt the city is going to do anything about it,” Stein says.
