On which type of building may a flip tax be imposed during a transfer?

• A. Cooperative
• B. Single-family home
• C. Condominium
• D. Townhouse

Answer: (A)

A flip tax is a fee that some cooperative housing associations impose when a unit is sold. This fee is typically calculated as a percentage of the sale price or a fixed amount determined by the board of the cooperative. The purpose of the flip tax is to generate revenue for the cooperative and cover various expenses, such as maintenance or improvements to the building.

In contrast, other types of properties like single-family homes, condominiums, and townhouses do not typically have flip taxes. Instead, the selling and purchasing processes for these types of properties usually involve standard closing costs and fees associated with transferring ownership, rather than a specific fee imposed by an association related to a sale. This makes cooperatives unique in the potential for flip taxes during property transfers, highlighting their governance structure and the role of the cooperative board in managing financial matters related to ownership transfer.