NY1 reports federal legislators may pass a new law in New York which would prevent lenders from giving mortgages to residents moving into homes for sale which have a flip, or transfer, tax.
The possible move by the Federal Housing Finance Agency is reportedly aimed to prohibit developers from mandating a fee from homeowners when they sell the property. The station adds most residential buildings in New York City have a flip tax.
Eva Talel, a real estate attorney in New York, told the station, "The proposed legislation would essentially prohibit Fannie and Freddie and the federal home loan bank from investing in mortgages" in buildings with the tax.
According to NY1, the problem property managers have with the proposed legislation is that most of the money from the flip tax is used for building maintenance and improvements.
The Council of New York Cooperatives and Condominiums states flip taxes "began as an attempt to solve problems inherent in the housing market during the early 1970's." There are four types of flip taxes buildings can employ, the council says.
