1. (a) Person means an individual, partnership, society, association, joint stock company, corporation, estate, receiver, trustee, assignee, referee or any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, any combination of individuals, and any other form of unincorporated enterprise owned or conducted by two or more persons.

2. (b) Controlling interest means:

   1. (1) in the case of a corporation, either fifty percent or more of the total combined voting power of all classes of stock of such corporation, or fifty percent or more of the capital, profits or beneficial interest in such voting stock of such corporation; and
   2. (2) in the case of a partnership, association, trust or other entity, fifty percent or more of the capital, profits or beneficial interest in such partnership, association, trust or other entity. (See section 575.6 of this Part.)

3. (c) Real property means every estate or right, legal or equitable, present or future, vested or contingent, in lands, tenements or hereditaments, including buildings, structures and other improvements thereon, which are located in whole or in part within the State of New York. It does not include rights to sepulture.

   1. (1) Consideration means the price actually paid or required to be paid for the real property or interest therein, including payment for an option or contract to purchase real property, whether or not expressed in the deed and whether paid or required to be paid by money, property, or any other thing of value. It includes the cancellation or discharge of an indebtedness or obligation. It also includes the amount of any mortgage, purchase money mortgage, lien or other encumbrance, whether or not the underlying indebtedness is assumed or taken subject to. However, consideration does not include the amount of any lien or encumbrance remaining thereon at the time of sale where the conveyance involves a one-, two-, or three-family house or individual residential condominium unit or where the consideration for the conveyance is less than $500,000. With respect to any conveyance of stock in a cooperative housing corporation in connection with the grant or transfer of a proprietary leasehold by the owner thereof, other than the original conveyance of stock by the cooperative housing corporation or the cooperative plan sponsor, where the property is an individual residential unit, the consideration for the interest conveyed will exclude the amount of any liens on certificates of stock or other evidences of an ownership interest in and a proprietary lease from a corporation or partnership, formed for the purpose of cooperative ownership of residential interest in real estate remaining thereon at the time of conveyance. No exclusion is made on account of any lien or encumbrance placed upon the property in connection with the conveyance, or by reason of deferred payments of the purchase price whether represented by notes or otherwise. Example 1: Example 2:

      Example 1:

      A three-family house is sold for $850,000. The grantee assumed an existing $200,000 mortgage, obtained an additional $550,000 mortgage from a bank and paid $100,000 in cash. The tax is imposed upon $650,000, because the $850,000 consideration is reduced by the $200,000 mortgage which remained on the qualifying residential property at the time of the sale. However, the $850,000 cannot be reduced by the new $550,000 mortgage obtained by the grantee in connection with the sale. The result would have been the same if the grantee had purchased the property subject to an existing $200,000 mortgage which remained on the property at the time of the sale.

      Example 2:

      A commercial building is sold for $800,000. The grantee assumed an existing $300,000 mortgage and paid $500,000 in cash. The tax is imposed on the entire $800,000 because the consideration exceeds $500,000 and the building is not qualifying residential property. No exclusion is allowed for the existing $300,000 mortgage. The result would have been the same if the grantee had purchased the property subject to an existing $300,000 mortgage and/or obtained an additional mortgage with respect to the $500,000.

   2. (2) In the case of a creation of a leasehold interest or the granting of an option with use and occupancy of real property, consideration includes, but is not limited to:

      1. (i) the present value of the rental and other payments attributable to the use and occupancy of the real property or interest therein;
      2. (ii) the amount paid for an option to purchase or renew; and
      3. (iii) the present value of rental or other payments attributable to the exercise of any option to renew.

   3. (3) In the case of a creation of a subleasehold interest, consideration includes, but is not limited to:

      1. (i) the present value of the sublease rental payments attributable to the use and occupancy of the real property;
      2. (ii) the amount paid for an option to renew; and
      3. (iii) the present value of rental or other payments attributable to the exercise of any option to renew, less the present value of the remaining prime lease rental payments required to be made.

   4. (4) In the case of the transfer or acquisition of a controlling interest in any entity that owns real property, consideration means the fair market value of the real property or interest therein, apportioned based on the percentage of the ownership interest transferred or acquired in the entity. Example:

      Example:

      An individual purchased fifty percent of the stock of the ABC corporation which owned real property with a fair market value of $300,000. The ABC corporation would compute the transfer tax due on this conveyance of an interest in real property based upon consideration of $150,000 ($300,000 × 50 percent).

   5. (5) In the case of an assignment or surrender of a leasehold interest or the assignment or surrender of an option or contract to purchase real property, consideration does not include the present value of the remaining rental payments required to be made pursuant to the terms of such lease or the amount to be paid for the real property pursuant to the terms of the option or contract being assigned or surrendered. Example:

      Example:

      A leases real property to B for a term of 20 years. The lease does not contain any option to purchase the real property. In year five of the lease, B assigns its leasehold interest to C for $100,000. B owes transfer tax on the assignment. The tax is computed on consideration of $100,000.

   6. (6) In the case of (i) the original conveyance of shares of stock in a cooperative housing corporation in connection with the grant or transfer of a proprietary leasehold by the cooperative corporation or cooperative plan sponsor and (ii) the subsequent conveyance by the onwer thereof of such stock in a cooperative housing corporation in connection with the grant or transfer of a proprietary leasehold for a cooperative unit other than an individual residential unit, consideration includes a proportionate share of the unpaid principal of the mortgage on the real property of the cooperative housing corporation comprising the cooperative dwelling or dwellings. Such share is determined by multiplying the total unpaid principal of the mortgage by a fraction, the numerator of which is the number of shares of stock in the cooperative housing corporation being conveyed in connection with the grant or transfer of a proprietary leasehold and the denominator of which is the total number of shares of stock in the cooperative housing corporation.

   7. (7) When a grantor agrees to extend the closing date of the contract in return for an additional sum of money, the additional sum of money is included as consideration unless the following criteria are met:

      1. (i) The agreement between the grantor and grantee must state that the payment is for the time delay.

      2. (ii) The amount of money must be reasonable for the length of delay.

         (e)

   8. (1) Conveyance means the transfer or transfers of any interest in real property by any method, including but not limited to sale, exchange, assignment, surrender, mortgage foreclosure, transfer in lieu of foreclosure, option, trust indenture, taking by eminent domain, conveyance upon liquidation or by a receiver, or transfer or acquisition of a controlling interest in any entity with an interest in real property.
   9. (2) Notwithstanding the foregoing, conveyance of real property does not include a conveyance pursuant to devise, bequest or inheritance; the creation, modification, extension, spreading, severance, consolidation, assignment, transfer, release or satisfaction of a mortgage; a mortgage subordination agreement, a mortgage severance agreement, an instrument given to perfect or correct a recorded mortgage; or a release of lien of tax pursuant to the Tax Law or the Internal Revenue Code.

   (d)

4. (f) Interest in the real property includes title in fee, a leasehold interest, a beneficial interest, an encumbrance, development rights, air space and air rights, or any other interest with the right to use or occupancy of real property or the right to receive rents, profits or other income derived from real property. It also includes an option or contract to purchase real property. It does not include a right of first refusal to purchase real property.
5. (g) Grantor means the person making the conveyance of real property or interest therein. Where the conveyance consists of a transfer or an acquisition of a controlling interest in an entity with an interest in real property, grantor means the entity with an interest in real property or a shareholder or partner transferring stock or partnership interest, respectively.
6. (h) Grantee means the person who obtains real property or interest therein as a result of a conveyance.
7. (i) Recording officer means the county clerk of the county, except in a county having a registrar, where it means the registrar of the county, or in the City of New York where it means the city registrar.
8. (j) Commissioner means the Commissioner of Taxation and Finance or his or her delegates.
9. (k) Department means the Department of Taxation and Finance.
10. (l) Fair market value means the amount that a willing buyer would pay a willing seller for real property. It is generally detetermined by a appraisal based upon the value of the real property at the time of conveyance. It is not net fair market value, which is fair market value less the amount of any mortgages on the property.

Tax Law, §§ 1401, 1402, 1405-B

As used in this Part, unless otherwise expressly stated, the terms set forth in this section are defined as follows: