Riverside Abstract

Since 1999, Riverside Abstract provides professional title services for homeowners and investors throughout the states of New York and New Jersey. Within its offices, the company offers their premium services its clients. The title agency is recognized creating a strong relationship with is customers, providing close transactions with accuracy and on time.

With the topic "Real Estate and Title Insurance" Riverside Abstract specialist lawyer for property law share his thoughts on the title insurance in New York. Lawyers of the agency address three important legal issues in title protection. Title insurance is a critical element in protecting the client's real estate investment. For its clients, the company provides a legal coverage for all their needs. Riverside Abstract Title Insurance Agency is underwritten by New Jersey Title Insurance Company, Commonwealth Land Title Insurance Company, New York Title Insurance Company, First American Title Insurance Company.

US Tax Law

The US Tax Law imposes an extra tax on each conveyance of residential real property or interest in real property when the consideration for the entire conveyance is over $1 million. This additional tax is tracking purchases that go back to more than a couple of years from the purchase date. In the text below, lawyers from Riverside Abstract LLC share their experience with implications that come from this mansion tax. This tax is considered as a change in tax policy in the New York State.

In New York State the initial transfer tax rate is $4.00 for every thousand dollars. When the property purchases surpass million dollars it is not taxed, but subjected to a higher rate of RPT transfer tax of 2.625%. When it comes to residential purchases of over one million dollars, the basic RPT transfer tax is lower to 1.425%. Sometimes a purchase transaction can be considered commercial for RPT tax purposes and mortgage tax purposes and still be subjected to the mansion tax.
Usually, the conveyance is subject to both taxes in cases of mixed-use. At Riverside Abstract explain that in New York and New Jersey purchases of over $1 million dollars of one parcel that includes both commercial and residential portions can be taxed with both rates. An example is given when a two-family house is used for residential purposes, and the other unit is used for commercial purposes as a retail store. The owner sells the house for $2 million. Here, the residential unit value is $500,000 and the retail unit is valued at $1.5 million. In determining whether the consideration for the conveyance is $1.5 million or more, the con-side ration for the entire conveyance must be taken into account. Here, the conveyance is subject to the additional tax but only on the value of the residential unit.

Riverside Abstract Assistance

Whether title insurance, real estate purchase or anything related to this topic is a subject of interest with the clients, people at Riverside Abstract give an expert view for the Patch readers on what a real estate or property title insurance is.

Another example is with purchases of related properties which aggregate over $1 million. When one grantor enters signs a contract for selling a parcel improved by a one-family house to Grantee B for a sum lower than $1 million. Simultaneously, the same grantor contracts another one for selling the adjacent parcel of vacant land for $400,000. In such cases when both the timing and terms of the contracts indicate that the conveyances are related, both parcels are used in conjunction with each other and are considered a residential real property. In such a scenario, when the entire property is subject to the additional tax, the grantee must pay an additional tax.

For purchases of multiple condominium units that go over $1 million dollars, which are used in conjunction with one another, if all three units are used in conjunction with one another, they comprise one residential unit and the additional tax applies to the total.

With the transfer of a membership interest for over $1 million when one individual owns 100% of the membership interest in a limited liability company (LLC)the grantee is required to pay an additional tax of 1% of the total sum.

For those that are looking for purchasing a property that has a residential portion, Riverside Abstract notes that it is most important to assess the possibility that the purchase will be subject to the mansion tax. With every purchase, Riverside Abstract’s team of experienced title attorneys ensures that every transaction goes smoothly.