YOUR 1031 EXCHANGE PARTNER

Partner With a Trusted 1031 Exchange Company in New York

First American Exchange Company is here to help you navigate the ins and outs of 1031 exchanges in New York. Given New York’s high real estate values, investors may face significant capital gains taxes when selling property. A 1031 exchange allows them to reinvest those gains without a tax hit, keeping more of their capital working for them. This can be especially valuable in New York City, where appreciation is often substantial.

To qualify for a 1031 exchange, both the relinquished and replacement properties must be held for investment or business use. Primary residences and properties held for resale are excluded. All real estate is generally considered like-kind to other real estate under IRS rules, including urban rental buildings, mixed-use properties, commercial, retail spaces, industrial warehouses, agricultural land and rural acreage, short-term rental properties (Airbnb, VRBO), long-term residential rentals, and vacant land held for investment.

Do Co-Ops in New York Qualify for a 1031 Exchange?

In 2020, the IRS updated its regulations to clarify that stock in a cooperative housing corporation qualifies as real property for 1031 exchange purposes, provided certain conditions are met. This change standardized what was previously an inconsistent classification that depended on state law. Under current rules, co-op shares held by tenant-stockholders—especially those coupled with a proprietary lease, as is common in New York—may now be eligible for a like-kind exchange. However, qualification still depends on how the property is owned and used under both federal and state law.

New York State Taxes

Investors can defer both federal and New York state capital gains taxes by reinvesting in a like-kind property. While New York does not impose special restrictions on 1031 exchanges, investors must still consider state and local taxes:

• New York State Transfer Tax: Between 0.4% - 0.65% depending on sale price.

• New York City Transfer Tax: Ranges from 1% to 2.625% depending on sale price.

These taxes may apply during the exchange but do not disqualify it when properly structured.First American Exchange Company has decades of experience guiding investors through the 1031 exchange process. Whether you’re buying property in Manhattan, Brooklyn, Buffalo, or beyond, we’ll help you defer capital gains taxes and grow your portfolio strategically.

To learn more, join one of our complimentary educational webinars.