A recent private letter ruling published by the NYS Department of Taxation & Finance (the “Tax Department”) has opined that the conveyance of a license agreement for a parking space and storage space, in conjunction with the conveyance of a condominium unit, constitutes a single conveyance of real property for the purposes of NYS Tax Law Article 31. Accordingly, the Tax Department ruled, the consideration paid for all three interests must be aggregated for the purposes of calculating the New York State real property transfer tax.

Citing to Matter of Sacks, New York Division of Tax Appeals (Decision No. 822322, March 10, 2011), the Tax Department confirmed that the definition of “conveyance” in NYS Tax Law §1401 means the “transfer or transfers of any interest in real property.” The Tax Department further opined that when multiple conveyances occur, whether or not effectuated by one or more sales contracts, if the interests in real property being conveyed are “used in conjunction with one another or there is a clear relationship between each [interest in real property being conveyed],” the transfers will be aggregated and treated as a single conveyance for the purposes of calculating the transfer tax, including any additional tax (commonly referred to as the “mansion tax” for residential conveyances of $1 million or more), and supplemental tax.

In the context of condominium purchases and sales, the effect may be significant, as a prospective seller or offeror may be conveying one or more “units” (often including a parking space and/or storage space) which are used in conjunction with one another to incentivize a prospective purchase, thereby increasing the likelihood of creating additional transfer tax liability for a prospective seller or offeror.