To transfer residency status when buying a home in New York City, the buyer must first establish permanent residency by meeting NYC’s criteria: being a U.S. citizen, green card holder, or legal resident with proof of intent to live in the city. They must then file Form IT-201 with the New York State Tax Department, declaring their new residency and providing documentation such as a signed lease or utility bill. The property title must reflect the new residency status, and the buyer should update voter registration, driver’s license, and Social Security records. Property taxes may shift from non-resident rates (up to 1.28%) to resident rates (0.25–2.5%), depending on income and location. Professional advice from a real estate attorney or tax advisor is recommended to navigate compliance with local laws like the NYC Tax Code Section 11-702 and state regulations.

The process is critical because NYC imposes significant tax disparities between residents and non-residents. For example, non-residents pay higher property taxes on primary residences (averaging $8,000 annually versus $4,500 for residents, per NYC Department of Finance 2022 data). Residency also affects income tax brackets, with residents taxed at 4–8.82% versus non-residents at 8–10.9% (New York State Taxation and Revenue, 2023). Incorrect status can lead to penalties, as 15% of non-compliant cases face fines exceeding $5,000 (NYC Taxation Division, 2021). Updating voter registration and driver’s licenses is mandatory to avoid legal issues, as non-residents face restrictions on certain city services. Additionally, NYC’s J-51 tax abatement program requires proof of residency to qualify for property tax reductions. Ensuring proper documentation preserves long-term financial benefits and legal compliance.