§ 1402. Imposition of tax. (a) A tax is hereby imposed on each\nconveyance of real property or interest therein when the consideration\nexceeds five hundred dollars, at the rate of two dollars for each five\nhundred dollars or fractional part thereof; provided, however, that with\nrespect to (A) a conveyance of a one, two or three-family house and an\nindividual residential condominium unit, or interests therein; and (B)\nconveyances where the consideration is less than five hundred thousand\ndollars, the consideration for the interest conveyed shall exclude the\nvalue of any lien or encumbrance remaining thereon at the time of\nconveyance. The rate of this tax shall be: (1) two dollars for each five\nhundred dollars or fractional part thereof on all conveyances of real\nproperty or interest therein; plus (2) an additional one dollar and\ntwenty-five cents for each five hundred dollars or fractional part\nthereof of consideration on each conveyance of real property or interest\ntherein within any city in this state having a population of one million\nor more (i) when the consideration for the entire conveyance of\nresidential real property is three million dollars or more, and (ii)\nwhen the consideration for the entire conveyance of any other property\nis two million dollars or more. For purposes of this section,\nresidential real property shall include any premises that is or may be\nused in whole or in part as a personal residence, and shall include a\none, two, or three-family house, an individual condominium unit, or a\ncooperative apartment unit.\n (b) (1) Notwithstanding the provisions of subdivision (a) of this\nsection, in the case of any real estate investment trust transfer\noccurring on or after the effective date of this subdivision, the tax\nimposed under subdivision (a) of this section shall be imposed at the\nrate of one dollar for each five hundred dollars or fractional part\nthereof of consideration.\n (2) (A) For purposes of this subdivision, the term "real estate\ninvestment trust" (hereinafter referred to as a "REIT") shall have the\nsame meaning as in section 856 of the internal revenue code.\n (B) For purposes of this subdivision, the phrase "real estate\ninvestment trust transfer" shall mean any conveyance of real property or\nan interest therein to a REIT, or to a partnership or corporation in\nwhich a REIT owns a controlling interest immediately following the\nconveyance, which conveyance (I) occurs in connection with the initial\nformation of the REIT, provided that the conditions set forth in clauses\n(i) and (ii) of this subparagraph are satisfied, or (II) in the case of\nany real estate investment trust transfer occurring on or after July\nthirteenth, nineteen hundred ninety-six and before September first, two\nthousand twenty-six, is described in the last sentence of this\nsubparagraph.\n (i) The value of the ownership interests in the REIT, or in a\npartnership or corporation in which the REIT owns a controlling\ninterest, received by the grantor as consideration for such conveyance\nmust be equal to an amount not less than forty percent of the value of\nthe equity interest in the real property or interest therein conveyed by\nthe grantor to the grantee and such ownership interests must be retained\nby the grantor or owners of the grantor for a period of not less than\ntwo years following the date of conveyance; provided, however, that in\nthe case of the death of the grantor or an owner of the grantor within\nsuch two year period, this two year retention requirement shall be\ndeemed to be satisfied notwithstanding any conveyance of such ownership\ninterests held by such individual as a result of such death. The value\nof the equity interest in such real property or interest therein shall\nbe computed by subtracting from the consideration for the conveyance\n(determined in accordance with paragraph three of this subdivision) the\nunpaid balance of any loans secured by mortgages or other enc
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