A reader residing in West Village Houses pointed out a phrase in the last paragraph of June 2018 article “West Village Houses Rally for Preservation” (Pg. 6) that needs correction: “In 2002, WVH was sold under the (HDFC) cooperative Programs to 380 of 420 tenants for about $150,000; the Program included a 25% “flip tax” (percentage of profit) paid to the co-op.”
In greater detail, this is the correct information regarding the flip tax at West Village Houses:
On March 9, 2006, West Village Houses became a co-op, but with restrictive prices under HDFC. The regulatory agreement called for 12 years; as of March 10, 2018, WVH became a free-market entity. Up to March 9th of this year, a 15% flip tax based on the net purchase price was imposed on restricted sales, charged to sellers and goes to the Coop’s reserve. Currently, a 25% flip tax is in effect, based on the net purchase. This is a very excessive flip tax, and the understanding is that it will be greatly reduced once a certain number of apartments/shares have been sold and closed in the complex, having then the ability to pay down outstanding taxes.
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—Brian Pape
