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 Amendment to NYS Tax Law Affects Recording of Deeds for LLCs

Section 1409(a) of the New York Tax Law has been amended, effective September 13, 2019, in relation to real property transfer tax returns of limited liability companies (LLC). The new legislation is available at: https://assembly.state.ny.us/leg/?default_fld=&bn=S01730&term=2019&
Summary=Y&Actions=Y&Text=Y&
Committee%26nbspVotes=Y&Floor%26nbspVotes=Y

The amended legislation “requires the real property transfer tax return relating to residential property sold or purchased by a limited liability company to include information on the ownership of such company.” S1730 Sponsor Memo

The amendment only applies to the conveyance of residential real property containing one- to four-family dwelling units when the grantor or grantee is an LLC. The implementation of the amendment requires changes to the TP-584, which have not yet been finalized by New York State Department of Taxation and Finance (DOTF). Until the revised form is promulgated by DOTF and set up in the County’s PREP system, the following procedure must be followed:

If you are recording a deed:

  • of a residential real property containing a one- to four- family dwelling unit, and
  • a grantor or a grantee is an LLC
  1. If a grantor or grantee of a Single Member LLC is a natural person, the TP-584 may be completed as in the past until the revised TP-584 is promulgated and accessible.
  2. If the grantor or grantee is an LLC and the member of the grantor or grantee LLC is not a single natural person, then all members, managers, or any other authorized persons must be listed and included on a separate page behind the TP-584. “Other” should be chosen as Grantor or Grantee type on the TP-584 in Schedule A.
  3. If a member of the LLC is another LLC or other business entity, all shareholders, directors, officers, members, managers, partners and authorized persons of said LLC or business entity must be listed by name and business address until “full disclosure of ultimate ownership by natural persons is achieved.”
  4. When submitting electronically, the page with the LLC information should be scanned as the last page of the TP-584. Once DOTF finalizes the changes to the TP-584, the changes will be implemented in Westchester County’s PREP system, so the LLC members would be entered on the Parties screen and they would show up as an additional page to the TP-584 automatically. Until the revised TP-584 is promulgated and set up in PREP, the page will simply be manually created by the submitter and scanned with the TP-584.

This notice will be updated upon promulgation of further guidance from the New York State Department of Taxation and Finance.

Click here for a sample addendum which can be filled in and submitted to fulfill the above requirements.

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