Buying in Manhattan and Beyond: Condo or Co-op? A Guide for New York Buyers

Ask a New York broker what you are buying when you buy an apartment, and the first answer is often a question: condo or co-op? Many buyers arriving from Miami, Europe or Latin America assume an apartment is simply real estate with a deed. In New York, however, many apartments are co-ops, where buyers acquire shares in a corporation and the right to occupy a unit rather than a deed to the apartment. Here is how they compare in practice.

Deed or shares: the legal starting point

With a condominium, you take title to real property: a deed to the unit plus an undivided percentage of the common elements. The unit is its own tax lot.

With a cooperative, a housing corporation owns the building. You buy shares in that corporation and sign a proprietary lease giving you the right to occupy one apartment. You become a shareholder-tenant rather than a deed holder, and that shapes everything that follows.

Getting past the board

A co-op sale depends on the consent of the board of directors. Expect to assemble a full board package (financial statements, tax returns, account statements, references, the signed contract) and to attend an interview. Boards may decline without giving a reason, as long as they do not discriminate on a basis prohibited by fair-housing laws, and many apply their own financial thresholds for down payment and post-closing reserves.

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 deadlines govern the process only; they do not mean automatic approval, and a board may still approve, approve with conditions or deny.

Condo boards generally hold a right of first refusal rather than a veto. It is seldom exercised, and the application is usually lighter and quicker.

Paying for it: mortgages and share loans

A condo is financed with an ordinary mortgage on the unit. A co-op is financed with a share loan, secured by the shares and proprietary lease. Fewer lenders write share loans, the board must accept your financing, and some buildings limit the financed portion of the price or require all-cash purchases. Co-op down payment requirements are often stricter than a lender’s own; check the building’s rules before making an offer.

What you pay at closing

Statutory rates below; your attorney will confirm the figures for your deal.

• NYS real estate transfer tax: $2 per $500 of consideration (0.4%), normally paid by the seller; in NYC, residential sales of $3 million or more carry an additional base tax of $1.25 per $500, also normally on the seller.
• NYS mansion tax: 1% of the price, paid by the buyer, on residences of $1 million or more, condos and co-ops alike.
• NYS supplemental tax (NYC): on residential sales of $2 million or more, paid by the buyer, at a rate between 0.25% and 2.9%, determined by the price bracket and applied to the full taxable consideration (see the Form TP-584-NYC instructions).
• NYC Real Property Transfer Tax: for an individual condo unit or co-op apartment, 1% up to $500,000 and 1.425% above, normally paid by the seller, though sponsor contracts in new developments often shift it to the buyer.
• Mortgage recording tax: 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.

Add attorney and lender fees, title insurance for condos and a lien search for co-ops. 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 costs, line by line

A condo owner receives two bills: common charges from the condominium and real estate taxes from the NYC Department of Finance for the unit’s tax lot. A co-op shareholder pays one maintenance charge, which bundles building operations, a share of the building’s property taxes and often its underlying mortgage payments. Eligible tenant-stockholders may be able to deduct the portion attributable to taxes and mortgage interest; see IRS Publication 530 and your tax adviser.

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 the apartment later

Condos typically allow leasing within the limits of their bylaws. Co-ops usually restrict subletting, requiring board approval, fees, time limits or an initial owner-occupancy period. Short-term rentals of entire apartments are tightly restricted in New York City whichever you choose.

International buyers

Nothing in federal or New York law bars foreign nationals from buying either type, but condos are generally the more practical route for international buyers. Co-op boards tend to look for verifiable U.S. income and credit and for owner-occupants.

• 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.
• NY nonresident estimated tax. Nonresident sellers of New York real property, co-op units included, must compute gain and pay estimated personal income tax at transfer unless exempt (Forms IT-2663 and IT-2664).
• LLCs. 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.

Offering plans and the Attorney General

A sponsor may not offer condo units or co-op shares to the public in New York until its offering plan has been filed with, and accepted by, the Real Estate Finance Bureau of the New York State Attorney General. The plan and its amendments set out the budget, the sponsor’s obligations, the governing documents and the risks. Read it carefully, whether new development or resale. Filings are searchable in the Attorney General’s Offering Plan Database. Acceptance for filing is not an endorsement of the investment.

Choosing by how you will use it

• Primary residence. If you will live in the apartment full time and can meet a board’s financial review, both condos and co-ops are open to you; compare total monthly costs and closing taxes.
• Pied-a-terre. Occasional personal use and subletting are separate questions. Some co-ops limit part-time occupancy or require owner residence, and sublet rules are a different provision; check both in the building’s documents.
• Rental investment. Condos are usually the better fit, subject to their bylaws and lease rules.

A quick question

I live abroad. Is a co-op realistic?
It is legally possible, but the board decides, and many favor U.S.-resident buyers with U.S. finances. For buyers living abroad, condos often offer greater flexibility.

Work with Cosmore in New York

From our Miami headquarters and our New York office, Cosmore Real Estate helps buyers compare buildings, review offering plans and board requirements, and coordinate with attorneys and lenders. Talk to our New York team about the apartment you have in mind.

Sources

• NY State Dept. of Taxation and Finance, Real estate transfer tax: https://www.tax.ny.gov/bus/transfer/rptidx.htm
• NYC Dept. of Finance, Real Property Transfer Tax (RPTT): https://www.nyc.gov/site/finance/property/property-real-property-transfer-tax-rptt.page
• NYC Dept. of Finance, Mortgage Recording Tax: https://www.nyc.gov/site/finance/property/property-mortgage-recording-tax-mrt.page
• NY Attorney General, Offering Plan Database: https://ag.ny.gov/libraries-documents/offering-plan-database
• NY Attorney General, Real estate regulations (13 NYCRR): https://ag.ny.gov/resources/organizations/real-estate-regulation/rules-and-regulations
• NYC Council (Legistar), Int 1120-2024 / Local Law 2026/058: https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=7028966&GUID=47E050EC-31FA-4647-93A6-90F6CADD5BA0
• IRS, FIRPTA withholding: https://www.irs.gov/individuals/international-taxpayers/firpta-withholding
• IRS Publication 530: https://www.irs.gov/publications/p530