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Guides 8 min read

Condo vs Co-op in New York City: What Buyers Need to Know

Condo vs Co-op in New York City: What Buyers Need to Know

In most U.S. cities, buying an apartment means buying a condominium. New York City is different: a large share of its apartment stock is organized as cooperatives, or co-ops. The two can look identical from the street, sometimes even in the same neighborhood, but legally they are very different assets. Knowing the difference before you make an offer changes how you finance, what you pay at closing, what you pay each month, and what you can do with the apartment later.

What you actually own

Condo. A condominium unit is real property. You receive a deed to your apartment plus an undivided percentage interest in the building’s common elements (lobby, roof, elevators, and so on). The unit has its own tax lot and is taxed separately by the City.

Co-op. In a co-op, a cooperative housing corporation owns the entire building. As a buyer you purchase shares of stock in that corporation and receive a proprietary lease that gives you the right to occupy a specific apartment. You are a shareholder and a tenant of the corporation, not the owner of real estate in the traditional sense. That single difference drives almost everything else in this guide.

Board approval

Co-ops require approval from the corporation’s board of directors. Buyers typically submit a detailed application (“board package”) with financial statements, tax returns, bank and brokerage records, reference letters and the contract of sale, followed by an interview. The board may reject an applicant without stating a reason, provided it does not discriminate on a basis prohibited by fair-housing laws. Many co-ops also set their own financial requirements, such as minimum down payments and post-closing liquidity, in their house rules or bylaws.

Under Local Law 58 of 2026, for applications submitted from July 28, 2026, covered NYC co-ops must generally acknowledge application materials within 15 days and issue a decision within 45 days after the application is acknowledged or deemed complete, subject to statutory extensions and exceptions. The law generally excludes buildings with fewer than 10 units and certain regulated cooperatives. These are procedural deadlines, not automatic approval: the board can still lawfully approve, approve with conditions, or deny.

Condos usually have a right of first refusal instead of a full approval process: the board may match the price and buy the unit itself, but in practice it rarely does, and buyers still submit an application. The process is generally faster and less intrusive than a co-op review.

Financing and down payment

Because a condo is real property, a lender takes a conventional mortgage on the unit.

A co-op purchase is financed with a share loan (often called a co-op loan) secured by your shares and proprietary lease, not by a mortgage on real property. Fewer lenders offer co-op loans, and the board must also accept your financing; some co-ops cap the share of the price that may be financed, and some do not allow financing at all.

Down payment expectations are set by the lender and, for co-ops, by the building. Co-op boards often require a larger down payment than a lender alone would. Always read the building’s requirements before you bid.

Closing costs: the main taxes

Taxes are where condos and co-ops differ most at closing. The rates below are statutory; confirm the amounts for your transaction with your attorney.

New York State real estate transfer tax. $2 for each $500 of consideration (0.4%), normally paid by the seller. For residential property in New York City with consideration of $3 million or more, an additional base tax of $1.25 per $500 applies, also normally paid by the seller.

New York State “mansion tax”. An additional tax of 1% of the price, paid by the buyer, on residences where consideration is $1 million or more. It applies to condos and co-ops alike.

New York State supplemental tax (NYC only). For residential property in New York City with consideration of $2 million or more, the buyer also pays a supplemental tax at incremental rates between 0.25% and 2.9% depending on the price, as published in the instructions to Form TP-584-NYC.

NYC Real Property Transfer Tax (RPTT). For an individual residential condo unit or individual co-op apartment: 1% of the price if $500,000 or less, 1.425% if more than $500,000. It is normally paid by the seller, though in new-development sponsor sales contracts often shift it to the buyer.

Mortgage recording tax (MRT). This is the big difference. For a typical financed condo purchase in NYC, the buyer’s share of mortgage recording tax is generally 1.80% of the mortgage amount below $500,000 and 1.925% at $500,000 or more, before applicable exemptions or credits. These figures exclude the 0.25% generally payable by the lender. Individual co-op share loans are not subject to this tax.

Other costs typically include attorney fees, title insurance (condos), lien search (co-ops), and lender fees. Some co-ops charge a transfer fee, commonly called a ‘flip tax.’ This is a building-imposed charge, not a government tax; the governing documents and sale contract determine who pays it.

Monthly carrying costs

Condo owners pay two separate items: common charges to the condominium for building operations and reserves, and real estate taxes billed directly by the NYC Department of Finance on the unit’s own tax lot.

Co-op shareholders pay a single maintenance charge to the corporation. Maintenance covers building operations, the shareholder’s share of the building’s real estate taxes and, often, the debt service on the building’s underlying mortgage. A portion of maintenance attributable to real estate taxes and mortgage interest may be deductible for U.S. income tax purposes for eligible tenant-stockholders; ask your tax adviser and see IRS Publication 530.

Because maintenance includes items condo owners pay separately, a co-op’s monthly payment can look higher than a condo’s common charges. Compare total monthly cost, not line items.

For both condos and co-ops, also check for current or planned special assessments, which can increase ownership costs beyond the regular monthly charges.

Renting out: sublet rules

Condos are generally more flexible. Owners can usually lease the unit subject to the condominium’s bylaws, which may set minimum lease terms and require an application.

Co-ops are typically restrictive. Many limit subletting to a set period, require board approval for each subtenant, charge sublet fees, or prohibit it in the first years of ownership. If you plan to rent the apartment or use it only part of the year, a condo is usually the better fit. Note also that short-term rentals of entire apartments are heavily restricted in New York City regardless of the building type.

Buying as a foreign buyer

There is no federal or New York prohibition on foreigners buying either type of apartment, but in practice condos are far more accessible to international buyers. Co-op boards usually want U.S.-based income, assets and credit history they can verify, and many are reluctant to approve buyers who will not live in the apartment.

Tax points to discuss with your advisers:

  • FIRPTA. When a foreign person sells a U.S. real property interest, the buyer is generally required to withhold tax from the amount realized (generally 15%) under the Foreign Investment in Real Property Tax Act. Plan for this at resale.
  • New York nonresident estimated tax. Nonresident sellers of New York real property, including co-op units, must compute any gain and pay estimated personal income tax at transfer unless an exemption applies (Forms IT-2663 and IT-2664).
  • Buying through an LLC. Buying through an LLC may be possible in a condo, subject to the building’s governing documents and lender requirements. Ownership-disclosure and reporting obligations depend on the property and transaction. Many co-ops restrict or prohibit entity ownership.

The offering plan and the NY Attorney General

Any sponsor that offers condo units or co-op shares to the public in New York must first file an offering plan with the Real Estate Finance Bureau of the New York State Attorney General and have it accepted for filing. The offering plan, and its amendments, disclose the building’s budget, the sponsor’s obligations, the governing documents and the risks of the purchase. In a new development, you receive the plan before signing; in a resale, it remains a key document for your attorney’s due diligence, alongside the building’s financial statements and board minutes. Filed plans and amendments can be searched in the Attorney General’s Offering Plan Database. The Attorney General’s acceptance is not an approval of the merits of the investment.

Condo or co-op: which suits you?

A condo usually suits buyers who want flexibility to rent, buy from abroad, buy through an entity, or keep future resale simple. A co-op can suit buyers who will live in the apartment full time, can satisfy a board’s financial review, and want to avoid mortgage recording tax. Neither is “better” in the abstract; the right choice depends on how you plan to use and finance the apartment.

FAQ

Can a foreigner buy a co-op in New York City?

Legally yes, but each co-op board decides. Many prefer U.S.-resident buyers with verifiable U.S. finances, so most international buyers focus on condos.

Do co-op buyers pay the mansion tax?

Yes. The New York State mansion tax applies to residential property, including co-op apartments, when consideration is $1 million or more.

Is mortgage recording tax due on a co-op loan?

No. Individual co-op share loans are secured by shares and a proprietary lease, not a mortgage on real property, and are not subject to mortgage recording tax.

Who pays the NYC transfer tax?

By law the seller (grantor) normally pays the NYC RPTT and the State base transfer tax; the buyer pays the mansion tax and supplemental tax. Contracts, especially sponsor sales, can shift costs.

Talk to a New York condo specialist

Every building has its own rules, and the details matter more than the averages. If you are weighing a condo or a co-op in New York City, the team at Cosmore Real Estate and My Condo Expert can help you read the building’s documents, coordinate with your attorney and lender, and shortlist buildings that fit your plans. Contact us to start the conversation.

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