New York State's transfer tax rises from 0.4% to 0.65% on a conveyance of residential property in New York City once "the consideration for the entire conveyance" reaches $3,000,000. That phrase, from Tax Law section 1402, is why an owner with four or five buildings should decide how the sale is papered before deciding who to sell to. A package and a string of single sales reach different buyers, get priced by different methods, and land in different tax years.
Across three full market cycles I have watched owners who built a group of buildings over decades make this call in a single phone conversation, usually with whoever called first with an offer for everything. The right answer depends on the buildings, the owner's tax picture, and how much time the owner is willing to put into the sale. This guide lays out what actually differs so the decision gets made on purpose.
If you own one 2 to 4 family and are weighing whether to sell at all, start with the sell, hold, or exchange guide for long-held 2 to 4 families. This article is for the owner with several.
Two different buyer pools
A package of buildings is a commercial purchase no matter how small each building is. The buyers who can close on several properties at once are mostly investment funds, operating companies that already own and manage rental buildings, and well-capitalized private investors. They usually finance the purchase on a portfolio basis, meaning one lender underwrites the combined income of all the buildings rather than a separate mortgage for each. There are fewer of them, and they compare your package against every other income-producing asset they could buy that month.
A single two, three, or four family house reaches a different and much wider pool: buyers who plan to live in one unit and rent the others, and small investors adding one building at a time. Many of them use residential mortgage financing, which is written for properties of one to four units. That is the main reason a 2 to 4 family on its own often draws more showings and more offers than the same building bundled with four others.
How each buyer arrives at a price
A package buyer prices the whole on income. They take the rent roll, subtract operating costs, apply the return they need, and arrive at one number for everything. They also expect a concession for taking the whole group, including the building with the vacant unit, the building with the open violations, and the building that needs a roof. That concession is the price of convenience and speed, and it is real money.
A single-building buyer prices that building on its own comparables: recent sales of similar 2 to 4 families on nearby blocks, adjusted for condition, layout, and rent. Your best building gets priced as your best building, and your weakest building gets priced as what it is instead of dragging the others down. The trade is time and effort, since each sale is its own listing, its own contract, and its own closing.
Neither method is automatically higher. The only way to know which produces more for your group is to value each building on its own comparables and then compare the total with what an income buyer would pay for the package.
Get a written opinion of value on each building, then compare it with a package offer
Request Building ValuationsTransfer tax is counted per conveyance
Both transfer taxes are measured one conveyance at a time. The state tax under Tax Law section 1402 is imposed on "each conveyance" at $2 per $500 of consideration, which is 0.4%. In a city of one million or more it adds $1.25 per $500, bringing the total to 0.65%, when the consideration for the entire conveyance of residential real property is $3,000,000 or more, or when it is $2,000,000 or more for any other property. The statute defines residential property to include any premises used in whole or in part as a personal residence.
The city's real property transfer tax under Administrative Code section 11-2102 is imposed "on each deed." The Department of Finance's published rates are 1% up to $500,000 and 1.425% above that for a one to three family house, a condo unit, or a co-op, and 1.425% up to $500,000 and 2.625% above that for all other transfers. A four family building falls in the second group.
So a package sold under one contract can be structured with a separate deed for each building, and each deed's consideration then sets that deed's rate. Say, as an illustration, four buildings at $1,000,000 each. As four separate conveyances, each is below the state's $3,000,000 line and pays 0.4%. As one conveyance for $4,000,000, the whole amount is over the line.
The form you choose is the form you are taxed on
In Matter of Arbor Hill Associates (Tax Appeals Tribunal, June 26, 1997), a seller conveyed 27 separately assessed parcels to one buyer under one agreement and one deed, then argued they were 27 separate conveyances. The Tribunal held the transfer was a single conveyance, noting that the choice of form rested with the taxpayer, who bears the consequences. The lesson cuts both ways: how the deeds and the allocation of price are drafted is a decision for your attorney before the contract is signed, not something to argue about after closing.
One tax that is not yours at all: the state's mansion tax. Tax Law section 1402-a imposes 1% on a conveyance of residential real property when the consideration is $1,000,000 or more, and the statute says it "shall be paid by the grantee," which is the buyer. In New York City, Tax Law section 1402-b adds a supplemental tax on residential conveyances of $2,000,000 or more, also paid by the buyer. A buyer will count it in what they can pay, but it does not appear on the seller's side of the closing statement. To see what does, run each building through the seller net proceeds calculator.
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Timing the gain: installment sales and tax years
Selling one building at a time gives you control of which tax year each gain falls into. Two closings in December and two in January put half the gain in each year, which can matter for the bracket the gain is taxed in. The capital gains guide walks through the federal and New York layers.
Seller financing adds a second lever. Under IRC section 453, a sale where you receive at least one payment after the year of sale is an installment sale, and IRS Publication 537 explains that you can report part of the gain as each payment arrives instead of all of it at closing. Two limits matter for rental buildings. Publication 537 says depreciation recapture is reported in full in the year of sale whether or not you received a payment that year, and the installment method is not available to a dealer holding property for sale to customers. The method works on a package too, but carrying a note on a single building sold to an individual is a smaller and more manageable exposure than financing a fund's portfolio purchase.
A 1031 exchange across several buildings
Sellers who want to stay invested can exchange several relinquished buildings into replacement property under IRC section 1031. The regulation sets the clocks: 45 days to identify replacement property in writing and 180 days, or the due date of your return if earlier, to close on it. When several relinquished properties go in the same exchange on different dates, Treasury Regulation 1.1031(k)-1(b)(2)(iii) runs both clocks from the earliest transfer. Staggered single sales inside one exchange therefore do not buy extra time.
The identification limits are in paragraph (c)(4) of the same regulation. You may identify up to three properties of any value (the 3-property rule), or any number whose combined value does not exceed 200% of the combined value of everything you relinquished (the 200-percent rule). Identify more than the rules allow and the regulation treats you as having identified nothing. The 1031 exchange guide for NYC sellers covers the intermediary and the rest of the mechanics.
The practical work before any buyer sees it
- One rent roll per building. Unit, lease dates, legal rent, actual rent, and any regulatory status. A package buyer will read all of them and a single buyer will read one.
- One violation summary per building. Pull HPD and DOB records for each address with the building check tool so open items are priced by you, not discovered by the buyer.
- A data room. Leases, tax bills, water and sewer charges, insurance, certificates of occupancy, and recent capital work, organized by building.
- The ownership chart. Whether the buildings sit in one LLC or several shapes the sale. Selling the LLC interests instead of the buildings does not avoid city transfer tax: Administrative Code section 11-2102(b) taxes a transfer of an economic interest in real property, and section 11-2101 defines that to include a controlling interest, meaning 50% or more of an entity that owns real property.
Package or one at a time, side by side
| Factor | Sell as a package | Sell one at a time |
|---|---|---|
| Buyer pool | Fewer buyers: funds, operators, larger investors, portfolio financing | More buyers: owner-occupants and small investors, often residential financing |
| Time to close | One negotiation and one closing, if a buyer commits | Several listings and closings, spread over months |
| Pricing | Priced on combined income, with a concession for taking everything | Each building priced on its own comparables |
| Tax timing | Gain lands mostly in one year unless the terms spread it | Closings can be placed in different tax years |
| Transfer tax | Depends on how the deeds are drafted | Each deed measured on its own price |
| Effort | One data room, one buyer's diligence | Repeated showings, contracts, and closings |
A middle path exists and is often the honest answer: sell the strongest single buildings individually and offer the rest as a smaller package to an income buyer. What makes that possible is knowing, building by building, what each one is worth on its own before a package offer sets the frame.
Deciding how to sell a group of buildings?
Milton Coste, Licensed Real Estate Associate Broker, 25+ years in NYC real estate. I am not your attorney or your accountant, but I can give you a written opinion of value on each building so you can compare single sales against a package offer with real numbers.
Get a Written Opinion of ValueThis is planning context, not legal or tax advice. Statutory citations are to NY Tax Law sections 1402, 1402-a and 1402-b, NYC Administrative Code sections 11-2101 and 11-2102, IRC sections 453 and 1031, and Treasury Regulation section 1.1031(k)-1, together with IRS Publication 537, the NYC Department of Finance's published RPTT rates, and the Tax Appeals Tribunal decision in Matter of Arbor Hill Associates, DTA No. 812825 (June 26, 1997), all as of September 23, 2026. The dollar figures in the transfer tax illustration are an example, not market data. Confirm how your sale should be structured with a New York attorney and a tax professional before signing a contract.
