Manhattan is a popular neighborhood for luxury living, and demand for larger homes of this type has surged. Most of these properties are priced above $4 million, although there are available options under this price range. Deciding what type of purchase is best for your budget and lifestyle can be challenging. Here are four things to consider before buying a luxury property in Manhattan.
1. The Cost of Closing
When purchasing a luxury condo in Manhattan, be aware that the price you initially indicated is usually not the final cost. The closing costs could be higher than what one expects. You must ask the seller to include a thorough list of closing costs.
There are also a few costs that only apply to a specific property type outlined below.
Townhouses: Mortgage recording fee (buyers must pay a state and city mortgage tax of 1.925 percent on loans over $500,000)
Condos: Upfront building fees (board application fee and move-in charges); Transfer taxes (only applies to new units); and Mortgage recording fee
Co-ops: Upfront building fees (board application fee and move-in charges); Transfer taxes (only applies to sponsor units); and Escrow (some buildings may ask for an Escrow ranging from 3 months to several years)
2. Coop and Condo Fees vs. Maintenance Cost
Co-op and condo fees vary widely, even at the luxury level. This is mostly because taxes are included in co-op fees, but taxes are paid separately in condos. Also, the more amenities offered, the more monthly payments you’re likely to pay overall. But what about townhouses?
If you own a townhouse, you won’t need to pay for amenities you don’t plan to use, such as a shared roof deck, gym, or playroom. However, if a townhouse is your choice of property, you will be responsible for certain expenses that coop and condo owners never have to worry about.
For example, after any sidewalk repairs or snow removal, the façade of your property must meet city standards. Aside from these expenses, townhouses also require regular maintenance. Even if you don’t mind doing all this work yourself, the costs can add up.
When you buy a condo or co-op, you are only insuring your own unit. The building’s insurance covers the rest of the structure; however, the cost of insurance is much lower on a condo or co-op than on a townhome. While your condo or co-op fees still help pay for this insurance, even when you take this into account, the overall cost is still lower on a condo or co-op.
New York City has two classes of property. Class 1 properties are single-family houses. Class 2 properties are not single-family houses; they include apartment buildings, coops, and condos. Depending on your class of property and borough, your property tax might vary.
First, consider the different class tax rates. This will be useful if you’re in an upscale neighborhood in Brooklyn versus Manhattan. The state equalization rate refers to the percent of your home value on which you pay taxes. This percentage is set differently for different neighborhoods, reflecting the cost of living. Buying a class 1 property will give you a much lower tax liability than purchasing a class 2 property.
Overall, the tax rates are applied to the assessed value of your home. In New York City, the assessed value of your home is based on the market value of neighboring homes. In New York City, the assessed value of your home is based on the market value of neighboring homes.
Lincoln Towers is an eight-building apartment complex located on the prestigious Upper West Side in NYC. When you’re living in the Lincoln Square district, you’re a short walk away from outstanding restaurants, renowned cultural centers, the Broadway Theater district, Columbus Circle, Lincoln Center, The American Museum of Natural History, and so much more.
With everything you could ever want or need just a walk away, and with conveniently located train stations and bus stops, Lincoln Towers gives the feeling that the entire city is in its own backyard. If you’re looking for luxury apartments in the Upper West Side, look no further! Call us at (212) 787-1214 to inquire today!