Revised NYC Property Transfer Tax Return Requires New Disclosures for Multiple Member LLCs | Practical Law

Revised NYC Property Transfer Tax Return Requires New Disclosures for Multiple Member LLCs | Practical Law

The New York City Department of Finance now requires identifying information for all members of a multiple member Limited Liability Company that buys or sells real estate in New York City.

Revised NYC Property Transfer Tax Return Requires New Disclosures for Multiple Member LLCs

by Practical Law Real Estate
Published on 23 Jul 2015 • New York
The New York City Department of Finance now requires identifying information for all members of a multiple member Limited Liability Company that buys or sells real estate in New York City.
Effective May 18, 2015, the New York City Department of Finance issued new rules that amend Form NYC-RPT, the Real Property Transfer Tax Return, and require that all members of a multiple member Limited Liability Company (LLC) involved in a real estate transaction provide identifying information.
Form NYC-RPT is filed with the City upon the transfer of ownership of real property, through the Automated City Register Information System known as ACRIS. This form previously required grantors and grantees in such a transaction to provide their:
Before the recent revision, only single member LLCs needed to disclose any identifying information about its constituent member. The new form, however, requires this information from both single member LLCs and multiple member LLCs, as well as partnerships. These disclosures will not be a matter of public record and therefore available only to the Department of Finance.
The new rules were designed for two primary purposes:
  • To identify owners who may be avoiding city income taxes by claiming residency outside of New York City.
  • To make it more difficult for owners to hide purchases of real estate through the use of shell companies.
Critics are claiming the new rules do not go far enough to prevent these types of fraud, particularly because the revised form does not require the disclosure of the identity of the beneficial owner of the property, who may not be among the members of the holding LLC. These critics argue that a beneficial owner of New York City real property could still conceal its ownership by adding another layer of ownership beyond the LLC that holds the property.