2023 New York Laws › TAX - Tax › Article 11 - Tax on Mortgages › 255 - Supplemental Mortgages.

§  255.  Supplemental  mortgages.  1.  (a)  (i)  If  subsequent to the
recording of a mortgage on which all taxes, if any, accrued  under  this
article  have  been  paid,  a  supplemental  instrument  or  mortgage is
recorded for the  purpose  of  correcting  or  perfecting  any  recorded
mortgage,  or  pursuant  to  some  provision  or covenant therein, or an
additional mortgage is recorded imposing the lien thereof upon  property
not  originally  covered  by  or  not described in such recorded primary
mortgage for the purpose of securing the principal indebtedness which is
or under any  contingency  may  be  secured  by  such  recorded  primary
mortgage, such additional instrument or mortgage shall not be subject to
taxation  under  this article, except as otherwise provided in paragraph
(b) of this subdivision, unless it creates or secures a new  or  further
indebtedness  or  obligation  other  than  the principal indebtedness or
obligation secured by or which under any contingency may be  secured  by
the  recorded  primary  mortgage,  in  which  case,  a tax is imposed as
provided by section two hundred and fifty-three of this article on  such
new or further indebtedness or obligation.
(ii) Notwithstanding any provision to the contrary in subparagraph (i)
of  this paragraph, the taxes imposed by or pursuant to the authority of
this article shall apply to the recording of a  spreading  agreement  or
additional  mortgage  which  imposes the lien thereof upon real property
located in any city in the state having a population of one  million  or
more  and  not  originally covered by or described in a recorded primary
mortgage, unless the real property that becomes subject to the  lien  of
such  spreading  agreement  or  additional  mortgage  is  owned  by  the
mortgagor of the real property subject to  the  lien  of  such  recorded
primary mortgage. If the commissioner of taxation and finance finds that
transfers  of  one  or  both  of  such properties in connection with the
recording of the spreading agreement or additional  mortgage  have  been
undertaken  for  the  purpose  of avoiding or evading the application of
this paragraph  rather  than  solely  for  an  independent  business  or
financial  purpose,  such commissioner may disregard such transfers. For
purposes of this subparagraph, there shall be  a  presumption  that  all
transfers  of  one  or both of such properties to related parties within
the twelve-month  period  preceding  the  recording  of  such  spreading
agreement  or additional mortgage have been undertaken for tax avoidance
or evasion purposes and such presumption may be rebutted only with clear
and convincing evidence to the contrary.  For  this  purpose,  the  term
"related" shall have the same meaning as in paragraph (b) of subdivision
two  of  section  two  hundred fifty-three-a of this article except that
references to "fifty percent" in such paragraph (b)  shall  be  read  as
"twenty-five percent".
(b)  Notwithstanding any provision to the contrary in paragraph (a) of
this subdivision, taxes are imposed at the rates specified in  paragraph
(a)  of  subdivision  two  of  section  two  hundred fifty-three of this
chapter for each one hundred dollars and each remaining  major  fraction
thereof  of  principal  indebtedness  or  obligation secured by or which
under any contingency may be secured by  a  supplemental  instrument  or
additional  mortgage,  whether  or  not  there  is  any  new  or further
indebtedness or obligation other  than  the  principal  indebtedness  or
obligation  secured  by  the  recorded  primary  mortgage, where (i) the
supplemental instrument or additional mortgage imposes  the  lien  of  a
recorded  mortgage  upon  real  property  not  previously subject to the
mortgage or where an additional mortgage upon such  additional  property
is  recorded  as  additional  or substitute security for indebtedness or
obligation already secured by a recorded mortgage and such  property  is
situated  in  a county where the tax imposed by such paragraph (a) is in
effect and (ii) the recorded  primary  mortgage  was  on  real  property

situated  in  a  county  which  had  suspended  the  tax imposed by such
paragraph (a) and the mortgage was recorded without payment of such tax.
The taxes imposed by this subdivision shall be distributed  pursuant  to
section  two  hundred  sixty-one of this chapter in the same manner as a
tax imposed by subdivision two of section  two  hundred  fifty-three  of
this chapter.
(c)  The  taxes  imposed  by  this section shall be paid to the proper
recording officer at the time the supplemental instrument or  additional
mortgage is recorded.
2.  (a)  If,  at  the  time of recording such instrument or additional
mortgage, any exemption is claimed under this section,  there  shall  be
filed with the recording officer and preserved in his office a statement
under  oath of the facts on which such claim for exemption is based. The
determination of the recording officer upon the  question  of  exemption
shall be reviewable by the tax commission.
(b)  If  an exemption is claimed under this section, at any time after
such instrument or additional mortgage is recorded and tax  paid,  there
shall  be  filed with the tax commission, as part of the application for
refund a statement under oath of the  facts  on  which  such  claim  for
exemption  is based. A copy of the order of refund of the tax commission
shall likewise be filed with the recording officer and preserved in  his
office.