A Flip Tax is a fee paid by a seller or buyer on a housing co-op transaction. It is not a tax, and not deductible as a property tax. It is a transfer fee payable to the co-op upon the sale of an apartment.
Flip taxes are a method used by coops to raise money for the organization's overhead expenses without raising the maintenance fees or assessing additional charge to all residences. Charging the fee to those who are leaving the building seems to be a politically feasible way of raising operating revenue.
Types of Flip Taxes
- flat fee
- dollar amount based on the number of shares allocated to the subject apartment
- percentage based on the sales price
- percentage based on the net profit (sale vs purchase price)
- a fee based on the duration the seller has owned the apartments (typically, shorter ownership time periods bring higher fees) 
The imposition of flip taxes in New York City has been supported in the courts. The New York State Legislature in July 1986 acted on a proposal from the Council of New York Cooperatives and Condominiums and defined in what way co-ops could legally impose these fees. Specifically, the law allows such an assessment:
- if it is sanctioned in the co-ops proprietary lease, or
- if not sanctioned in the lease, as long as the lease is amended with more than two thirds of shareholders approving.