Co-op or condo? How buying a home in Manhattan works

About Co-op or condo? How buying a home in Manhattan works

By the ULTIMATE New York Editorial Team

Most Manhattan apartments are either co-ops or condominiums, and the difference shapes how you buy, finance and later sell or rent your home.

Co-ops

In a co-operative building you buy shares in the corporation that owns the building, and receive a proprietary lease for your apartment. The co-op board must approve buyers, usually after reviewing a detailed financial application and an interview, and it sets rules on financing, renting out and renovations.

Condominiums

A condominium is real property: you own your unit outright, with a share of the common areas. Condo boards generally have less say over who buys, which is why most new developments, and most buyers from overseas, choose condos.

In a co-op you buy shares in the building’s corporation, not the apartment itself.

Attorneys and closing

In New York, buyers and sellers normally each hire a real-estate attorney, who negotiates the contract, reviews the building’s finances and handles the closing. Your broker introduces the deal; your attorney protects you in it.

Taxes at closing

New York City charges a Real Property Transfer Tax of 1% on residential sales up to $500,000 and 1.425% above (nyc.gov). New York State adds a transfer tax of $2 for each $500 and, on homes of $1 million or more, a 1% mansion tax paid by the buyer, plus a supplemental tax in New York City at incremental rates between 0.25% and 2.9% based on the price (tax.ny.gov). Rates change: check with your attorney.

Our advice: decide early whether you want a co-op or a condo, because it changes the whole process.

Opening hours, prices and seasonal openings change, so please check with Co-op or condo? How buying a home in Manhattan works before you go.