Appeals court says Vornado will have to pay that $25M transfer tax after all
Use of sale value instead of city estimate could impact other REITs
Vornado Realty Trust will have to pay an additional $25.5 million in taxes on previous property sales, a New York state appeals court has confirmed.
The court upheld a February 2018 decision by the New York City Tax Appeals Tribunal, which resulted from an audit of the company’s 2011 sale of a stake in One Park Ave and now involves the taxes on several other transfers, the New York Post reported.
Vornado and its subsidiary Alexander’s had relied on the city’s Finance Department estimates of market value to calculated their discounted transfer taxes, while the new taxes will be based on the actual sale value, which is generally much higher.
The previous ruling also found that Vornado’s sale of One Park Ave fell just short of the 40 percent threshold that would qualify it for lower taxes. Two weeks ago, Vornado sold a 45 percent stake in prime retail portfolio valued at $5.6 billion to a group of investors including Crown Acquisitions and Qatar Investment Authority.
City property owners are now concerned that other past transfers may subjected to similar tax hikes, according to the Post. Because the court’s decision was unanimous, Vornado will have to seek leave to appeal from the state court of appeals. [NYP] — Kevin Sun