Mortgage Record Tax Exemptions

CEMA is the only thing I know of if there is an existing mortgage on the property...which I've now done twice, once for original purchase and once for re-fi. Banks don't like it, though, because it's a pain. First Republic does them, and Wells did it for me, but have been told they aren't any more.

http://www.nycmortgage.com/CEMA.php

CEMA cost me about $3K - $1k to your attorney and $2K to the bank.
Am I paying too much?

I talked to someone recently who used got a line of credit via private banking (HSBC), thus skipping that tax, which she was especially pleased to do because it was her first condo after owning (serially) about 15 coop units. Of course, LoC has substantial downsides and risks.

I can't imagine private financing vs. bank financing, each using the condo as collateral, would be exempt ... why would it?

ACRIS specifically mentions that, with respect to the NYC Mortgage Recording Tax, "certain exceptions may apply." They don't list any of these exceptions. Anyone know what these are or where to find a list of them?

Forgot to post the link: http://www.nyc.gov/html/dof/html/property/property_rec_mortgage.shtml

If one takes this route, no they still qualify for the mortgage deduction?

I don't think there are any relevant exceptions. The tax applies to the recording of the loan. You can borrow money unsecured (as Alanhart points out), but your "private financing" source would be crazy to do that -- an unrecorded mortgage cannot be foreclosed. And, I believe that the mortgage interest deduction by definition would not apply to an unsecured loan, and a mortgage that is unrecorded is nothing more than an unsecured loan.

nyc_sport, right. The LoC can't be secured by the property unless it's recorded. The city considers it a mortgage (the document is headed "Credit Line Mortgage") and collects the tax. Doesn't matter that the borrower may not have gotten their hands on the money yet.

E.g., 10WEA #29A just got a LoC for $450,000 and a regular mortgage for $400,000, and paid taxes on them of ~$9700 and $8000-something.

Co-op share loans aren't mortgages, so no tax, but supposedly NYC/NYS are trying to change that.

#7BC at the Laureate was another one where a buyer got a regular mortgage and a LoC, called an "Equity Line of Credit".

The mortgage was for $5,265,000, and tax was $114,484.

The LoC was for $400,000, and tax was $8670.

Good morning qball,

There are no exceptions to paying the NYS mortgage tax except when a CEMA (Consolidation, Extension, Modification and Assignment) is performed. Then the mortgage tax is reduced only to the percentage of "new" money in the new mortgage above and beyond the amount of the assigned mortgage.

If the Seller has an existing mortgage AND you are paying off that mortgage at closing (with cash or youru own mortgage loan) then you might possibly pull off this complicated legal maneuver.

First, the Seller and counsel must agree.

Second, the Seller's Lender must consent.

Third, your Attorney and/or title company must request and process the assignment.

You'll pay some legal fees to the existing Lender's attorneys for preparing and assigning the documents, but that amount pales in comparison to the mortgage tax in most NYC mortgages.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
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