New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter IV - Sales And Use And Other Miscellaneous Taxes › Subchapter D - Mortgage Recording Taxes › Part 645 - Supplemental Mortgages › Section 645.2 - Imposition of taxes upon recording of a supplemental mortgage

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 255, Administrative Code of the City of New
					 York, § 11-2601(f)
(a) The recording of
				  a supplemental mortgage is subject to the applicable mortgage recording taxes
				  as described in Part 642 of this Title to the extent that such mortgage creates
				  or secures a new or further indebtedness or obligation other than the principal
				  indebtedness or obligation secured or which under any contingency may be
				  secured by the prior recorded primary mortgage(s). (See Part 647 of this Title
				  for the special treatment of credit line mortgages on certain residential
				  property).
(b) For purposes of this
				  subdivision, the principal indebtedness or obligation secured by or which under
				  any contingency may be secured by the prior recorded primary mortgage is equal
				  to the remaining principal indebtedness secured or which under any contingency
				  may be secured by such mortgage at the time that the supplemental mortgage is
				  executed or at any time thereafter.
Example 1:
On January 1, 1990, Mr. Jones gives XYZ Bank a mortgage
					 securing a principal debt of $100,000 and the proper mortgage recording taxes
					 are paid. On January 1, 1991, at a time when the remaining principal
					 indebtedness secured by such prior recorded mortgage totals $90,000, Mr. Jones
					 gives XYZ Bank another mortgage which secures an additional $30,000. When the
					 mortgage was presented for recording the proper taxes computed upon the $30,000
					 amount were paid. Simultaneously, Mr. Jones and the bank enter into an
					 agreement which by its terms and conditions consolidates the liens of the two
					 mortgages into one lien securing a total principal debt of $120,000. The
					 consolidation agreement makes proper reference to the prior recorded mortgages.
					 Therefore, the consolidation agreement constitutes a supplemental mortgage
					 which may be recorded tax free since it does not secure any new or further
					 indebtedness other than that secured by the prior recorded primary
					 mortgages.
If the new $30,000 mortgage had by its terms consolidated
					 the liens of the two mortgages into one lien securing a total principal debt of
					 $120,000, the new mortgage itself would have constituted a supplemental
					 mortgage. The applicable mortgage recording taxes would apply to its recording
					 and taxes would be imposed and computed based upon the $30,000 of new or
					 further indebtedness secured by such mortgage.
(c) Notwithstanding any provision to the
				  contrary in subdivisions (a), (d), (e) and (f) of this section, where a
				  supplemental mortgage is recorded for one of the purposes set forth in section
				  645.1(a)(3) 
				  of this Part and the additional real property covered by the supplemental
				  mortgage is situated in a county where the additional tax is currently imposed
				  and the prior recorded primary mortgage is situated in a county where the
				  additional tax is currently imposed and the prior recorded primary mortgage was
				  on real property situated in a county that has suspended the additional tax,
				  and such tax was not paid, such additional tax, as described in section
				  642.2 
				  of this Title is imposed and computed based on the principal indebtedness or
				  obligation secured by or which under any contingency may be secured by such
				  supplemental mortgage on the date it is executed or at any time thereafter.
Example 2:
Mr. Smith gives Z Bank a mortgage on real property located
					 in Schoharie County, which is a county that has suspended the imposition of the
					 additional tax. The mortgage secures a principal debt of $50,000. The mortgage
					 is recorded and the proper mortgage recording taxes are paid. Subsequent to the
					 recording of such mortgage, Mr. Smith gives Z Bank a mortgage on real property
					 located in Albany County, as additional security for the payment of the same
					 $50,000 debt. Albany County imposes the additional tax.
The additional tax is imposed and computed upon the $50,000
					 debt secured by the supplemental mortgage.
(d) Notwithstanding any other provision to
				  the contrary in subdivisions (a), (c), (e) and (f) of this section, where a
				  supplemental mortgage is recorded for one of the purposes set forth in section
				  645.1(a)(3) 
				  of this Part, and the additional real property covered by the supplemental
				  mortgage is situated within the City of New York, and the recorded primary
				  mortgage was on real property situated outside such city and the City of New
				  York tax as described in section
				  642.4 
				  of this Title was not paid when the prior recorded primary mortgage was
				  recorded, such mortgage recording tax is imposed and computed based on the
				  principal indebtedness or obligation secured by or which under any contingency
				  may be secured by such supplemental mortgage.
Example 3:
Same facts as in Example 2 except that the real property
					 which is encumbered by the lien of the supplemental mortgage given as
					 additional security is located in New York City, where both the additional tax
					 and the City of New York tax are imposed, and the remaining principal debt
					 secured or to be secured by the first mortgage at the time the supplemental
					 mortgage is executed mortgage is $45,000.
The additional tax and the City of New York tax are imposed
					 upon the recording of the supplemental mortgage and computed upon the $45,000
					 debt secured by such supplemental mortgage.
(e) Notwithstanding any other provision to
				  the contrary in subdivision (a), (b), (c), (d) and (f) of this section, where a
				  supplemental mortgage is recorded for one of the purposes set forth in section
				  645.1(a)(3) 
				  of this part, and the additional real property covered by the supplemental
				  mortgage is situated within the City of Yonkers, and the prior recorded primary
				  mortgage was on real property situated outside such city and the City of
				  Yonkers tax described in section
				  642.5 
				  of this Title was not paid when the prior recorded primary mortgage was
				  recorded, such mortgage recording tax is imposed and computed based on the
				  principal indebtedness or obligation secured by or which under any contingency
				  may be secured by such supplemental mortgage at the date of execution of such
				  supplemental mortgage or at any time thereafter.
(f) Notwithstanding any other provision to
				  the contrary in subdivision (a), (b), (c), (d) and (e) of this section, where a
				  supplemental mortgage is recorded for one of the purposes set forth in section
				  645.1(a)(3) 
				  of this part, and the additional real property covered by the supplemental
				  mortgage is situated within Broome County, and the prior recorded primary
				  mortgage was on real property situated outside such county and the Broome
				  County tax described in section
				  642.6 
				  of this Title was not paid when the prior recorded primary mortgage was
				  recorded, such mortgage recording tax is imposed and computed based on the
				  principal indebtedness or obligation secured by or which under any contingency
				  may be secured by such supplemental mortgage at the date of execution of such
				  supplemental mortgage or at any time thereafter.