To transfer residency when purchasing a home in New York City, establish the property as a primary residence by proving intent through documents like utility bills, voter registration, and school enrollment. File a NYC tax return as a resident, update driver’s license and vehicle registration, and comply with state residency rules (e.g., spending 6+ months annually in NYC). Leverage tax incentives like the J-51 abatement for income-eligible buyers and avoid prorated transfer taxes by timing the purchase during tax periods. Consult a tax attorney or real estate attorney to navigate municipal and state regulations.

Establishing primary residency is critical because NYC taxes based on both income and residency. The NYC Department of Finance mandates that residents pay personal income tax (PIT) on all income and face higher property transfer taxes if the purchase occurs within three years of establishing residency. For example, non-residents pay a 1% transfer tax on the first $1.2 million of a sale, while residents pay 1.825% beyond that threshold. In 2022, the J-51 program saved buyers an average of $200,000 over 10 years by abating property taxes for income-eligible purchases in designated areas. Additionally, NYC residents save $10,000 annually compared to non-residents on average due to lower municipal taxes. However, missteps can lead to penalties; 15% of NYC homebuyers in 2023 faced unexpected tax liabilities after improper residency documentation, according to a City Council report. Compliance ensures access to incentives like the $15,000 property tax deduction for first-time buyers and avoids the 2.625% MTA surcharge for non-residents. Legal guidance is essential to align purchases with NYC’s complex residency and tax frameworks.