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 642 - Imposition Of Taxes › Section 642.7 - Examples of calculations of the mortgage recording taxes

Current through Register Vol. 46, No. 28, July 10, 2024
Example 1:
Mr. Smith acquires a one-family residence located in Nassau
					 County, which imposes the additional tax, for $120,000. To finance his
					 purchase, Mr. Smith borrows $100,000 from Bank Z and gives the bank a mortgage
					 on the residence as security for the loan.
When the mortgage is presented for recording the taxes due
					 are computed as follows:
Basic tax @ 50 cents rate
(($100,000 ÷ $100) × $.50)
$ 500
*Additional tax @ 25 cents rate
(($100,000 ÷ $100) × $.25)
$250
less: exemption for the first $10,000
(($10,000 ÷ $100) × $.25)
$25
Additional tax due
$225
**Special additional tax @ 25 cents rate
(($100,000 ÷ $100) × $.25)
$ 250
Total mortgage taxes due
$ 975.00
* Since the mortgaged property is principally improved by a
					 one-family residence, the $10,000 exclusion for purposes of the additional tax
					 is allowed. (See section 642[b] of this Part for information regarding the
					 $10,000 exclusion.)
** Since the mortgaged property is a one-family residence,
					 Bank Z is required to pay the special additional tax (see section
					 642.3[c] 
					 of this Part).
Example 2:
Same facts as in example 1, except that the mortgaged
					 property is located in New York City. In addition to the total tax computed in
					 Example 1, City of New York tax at a rate of one dollar for each $100 of
					 principal debt must be paid. Such tax would be $1000 given the facts of Example
					 1 computed as follows:
($100,000 ÷ $100) × $1.00 = $1,000.
Example 3:
Same facts as in Example 1, except that the mortgaged
					 property is located in the City of Yonkers. In addition to the total tax
					 computed in Example 1, City of yonkers tax at a rate of 50 cents for each $100
					 of principal debt must be paid. Such tax would be $500 given the facts of
					 Example 1 computed as follows:
($100,000 ÷ $100) × 50 cents = $500.
Example 4:
Mr. Smith borrows $100,000 from Bank Z and gives the bank a
					 mortgage on his 10-unit apartment building as security for the loan. The
					 apartment building is located in the Bronx, New York City.
When the mortgage is presented for recording the taxes due
					 are computed as follows:
Basic tax @ 50 cents rate
$500
*Additional tax @ 25 cents rate
$250
**Special Additional tax @ 25 cents rate
$250
City of New York tax @ one dollar rate
$1000
Total mortgage taxes due
$2000
* Since the real property covered by the mortgage is not
					 principally improved or to be improved by a one- or two-family residence or
					 dwelling, the $10,000 exclusion for purposes of the additional tax is not
					 allowed (see section
					 642.3[b] 
					 of his Part).
** Mr. Smith is required to pay the special additional tax
					 because the property is not principally improved by one or more structures
					 containing in the aggregate not more than six residential dwelling units, with
					 each unit having its own separate cooking facilities (see section
					 642.3[c] 
					 of this Part).
Example 5:
Mr. Jones sells a one-family residence located in Albany
					 County, which imposes the additional tax, to his son for $80,000 and takes back
					 a purchase money mortgage for 100 percent of the selling price.
When the mortgage is presented for recording the taxes due
					 are computed as follows:
Basic tax @ 50 cents rate
$400
Additional tax @ 25 cents rate
$200
*less: exemption for the first $10,000
$ 25
Additional tax due
$175
**Special additional tax
0
Total mortgage taxes due
$575
* Since the mortgaged property is principally improved by a
					 one family residence, the $10,000 exclusion for purposes of the additional tax
					 is allowed (see section
					 642.2[b] 
					 of this Part).
** The mortgage given to Mr. Jones is exempt from the
					 special additional tax based on the residential-natural person exemption as
					 provided at section
					 642.3[b] 
					 of this Part.
Example 6:
Mr. Jones owns two separate parcels of real property; one
					 parcel is improved with a retail store, the other with Mr. Jones' personal
					 residence. Both the store and the residence are located in Chenango County, a
					 county which does not impose the additional tax.
The fair market values of the real property comprising the
					 store and the personal residence are $110,000 and $75,000, respectively.
Mr. Jones borrows $50,000 from Bank X and gives the bank a
					 mortgage on the two parcels as security for the loan. When the mortgage is
					 presented for recording the taxes due are computed as follows:
Basic tax @ 50 cents rate
$250
*Special additional tax @ 25 cents rate
$125
Total mortgage taxes due
$375
* Mr. Jones is required to pay the special additional tax
					 in the above example as the fair market value of the store exceeds the fair
					 market value of the personal residence (see section
					 642.3[c] 
					 of this Part).
Example 7:
Mr. Jones owns a parcel or real property located in Albany
					 County, a county that imposes the additional tax. The parcel is improved by a
					 building which contains a commercial unit and a residential unit. The value of
					 the commercial unit exceeds the value of the residential unit.
Mr. Jones borrows $100,000 from Bank Z and gives the bank a
					 mortgage on the parcel as security for the loan.
When the mortgage is presented for recording the taxes due
					 are computed as follows:
Basic tax @ 50 cents rate
$ 500
* Additional Additional tax @ 25 cents rate
$ 250
**Special additional tax @ 25 cents rate
$ 250
Total mortgage taxes due
$1000
* Since the value of the commercial unit exceeds the value
					 of the residential unit, the parcel is considered principally improved by the
					 commercial unit, and therefore the $10,000 exclusion is not allowed for
					 purposes of the additional tax (see section
					 642.2[b] 
					 of this Part).
** Also, Mr. Jones is required to pay the special
					 additional tax because the property is not principally improved by one or more
					 structures containing in the aggregate not more than six residential dwelling
					 units (see section
					 642.3[c] 
					 of this Part).
Example 8:
A mortgage is to be recorded on a parcel of real property
					 which is improved by two buildings, one a two-family residence, and the other a
					 small retail grocery store.
The parcel is located in the Bronx, New York City. The
					 principal debt secured by the mortgage is $1 million. The mortgagee is Mr. W, a
					 natural person.
The fair market value of the two-family residence is
					 $750,000 and the fair market value of the grocery store is 450,000.
When the mortgage is presented for recording the taxes due
					 are computed as follows:
Basic tax @ 50 cents rate
$ 5000
*Additional tax @ 25 cents rate
$2500
less: exemption for the first $10,000
25
Additional tax due
$ 2475
**Special additional tax @ 25 cents rate
$ 2500
***City of New York tax @ $1.75 rate
$17500
Total mortgage taxes due
$27475
* Since the mortgage covers property principally improved
					 by the two-family residence, the $10,000 exclusion for purposes of the
					 additional tax is allowed (see section
					 642.2[b] 
					 of this Part).
** The mortgage would be required to pay the special
					 additional tax, since the property is considered principally improved by the
					 residential structure (see section
					 642.3[c] 
					 of this Part). Also, the residential-natural person exemption as described at
					 section
					 642.3(b) 
					 of this Part would not apply since the mortgage covers property which consists
					 of more than one structure.
*** Since the mortgage covers property which is not
					 strictly a one-, two-, or three-family house or an individual residential
					 condominium unit and the amount secured is $500,000 or more, the City of New
					 York tax is computed using the highest rate (see section
					 642.4[a] 
					 of this Part).
Example 9:
Mr. T owns a parcel of real property, a portion of which is
					 located in Schenectady County, and a portion of which is located in Montgomery
					 County. The property is improved by two buildings; one a two-family house, and
					 the other a small manufacturing plant. Scenectady County imposes the additional
					 tax. Montgomery County does not impose the additional tax.
The fair market values of the real property comprising the
					 two-family house and the manufacturing plant are $150,000 and $250,000,
					 respectively.
The assessed value of the portion of the parcel that is
					 located in Schenectady County, as such appears on the last assessment roll, is
					 $37,500. Such assessed value of the portion of the parcel located in Montgomery
					 County is $50,000.
Mr. T borrows $200,000 from Bank Y and gives the bank a
					 mortgage on the parcel as security for the loan.
Upon recording the mortgage the required return was filed
					 for the purpose of determining the correct amount of additional tax due.
The total taxes payable upon the recording of the mortgage
					 are computed as follows:
Basic tax @ 50 cents rate
$1000
*Additional tax - Imposed by Schenectady County
$37,500/$87,500 × $200,000 = $85,700 (portion of
								mortgage subject to additional tax)
$85,700 @ 25 cents rate
$214.25
**Special Additional tax @ 25 cents rate
500
Total mortgage taxes due
$1714.25
* The $10,000 exclusion is not allowed for the purpose of
					 computing the additional tax, as the parcel is considered principally improved
					 by the manufacturing plant (see section
					 642.2[b] 
					 of this Part).
** The special additional tax must be paid by the mortgagor
					 since the parcel is considered principally improved by the manufacturing plant
					 (see section
					 642.3[c] 
					 of this Part).
Example 10:
Mr. M owns an office building located in New York City. on
					 August 9, 1990 Mr. m borrowed $800,000 from Bank W and gave the bank two
					 mortgages (mortgage #1 and mortgage #2) on the office building as security for
					 the loan. Mortgage #1 secures $500,000 of the loan and mortgage #2 secures
					 $300,000. When the mortgages are presented for recording the taxes are computed
					 as follows:
Taxes due upon recording of mortgage #1
Basic tax @ 50 cents rate
$2500
*Additional tax @ 25 cents rate
$1250
**Special additional tax @ 25 cents rate
$1250
***City of New York tax @ $1.75 rate
$8750
Total mortgage taxes due on recording of mortgage
								#1
$13,750
Taxes due upon recording of mortgage #2
Basic tax @ 50 cents rate
$1500
*Additional tax @ 25 cents rate
$ 750
**Special additional tax @ 25 cents rate
$ 750
***City of New York tax @ $1.75 rate
$5250
Total mortgage taxes due on recording of mortgage
								#2
$8250
* Since the mortgage covers property improved by an office
					 building, the $10,000 exclusion for the purpose of computing the additional tax
					 is not allowed (see section
					 642.2[b] 
					 of this Part).
** Since each mortgage covers property which is principally
					 improved by an office building, the special additional tax must be paid by the
					 mortgagor (see section
					 642.3[c] 
					 of this Part).
*** Since the mortgages are part of the same or related
					 transactions and have the same mortgagor, the principal debt secured by each
					 mortgage must be added together to determine the applicable rate of the City of
					 New York tax. Since such aggregate amount is $500,000 or more and since each
					 mortgage covers other than a one-, two- or three-family house or individual
					 residential condominium unit, the City of New York tax must be computed using
					 the $1.75 rate (see section
					 642.4 
					 of this Part).
Example 11:
Mr. N owns two office buildings (Building #1 and Building
					 #2) located in New York City. On September 9, 1990 Mr. N borrows $700,000 from
					 Bank W. As security for the repayment of the loan Mr. N gives a mortgage to the
					 bank covering Building #1 which is stated to secure $400,000 and also gives
					 another mortgage to the bank covering Building #2 which is stated to secure
					 $300,000.
When the mortgages are presented for recording the taxes
					 are computed as follows:
Taxes due upon recording of mortgage covering
								Building #1
Basic tax @ 50 cents rate
$2000
*Additional tax @ 25 cents rate
$ 1000
**Special additional tax @ 25 cents rate
$ 1000
***City of New York tax @ $1.75 rate
$ 7000
Total mortgage taxes due on Building #1 mortgage
$11000
Taxes due upon recording of mortgage covering
								Building #2
Basic tax @ 50 cents rate
$1500
*Additional tax @ 25 cents rate
$ 750
**Special additional tax @ 25 cents rate
$ 750
***City of New York tax @ $1.75 rate
$5250
Total mortgage taxes due on Building #2 mortgage
$8250
* Since each mortgage covers property improved by an office
					 building, the $10,000 exclusion for purpose of computing the additional tax is
					 not allowed (see section
					 642.2[b] 
					 of this Part).
** Since each mortgage covers property which is principally
					 improved by an office building, the special additional tax must be paid by the
					 mortgagor (see section
					 642.3[c] 
					 of this Part).
*** Since the mortgages are part of the same or related
					 transactions and have the same mortgagor, the principal debt secured by each
					 mortgage must be added together to determine the applicable rate of the City of
					 New York tax. Since such aggregate amount is $500,000 or more and since each
					 mortgage covers other than a one-, two-, or three-family house or an individual
					 residential condominium unit, the City of New York tax must be computed using
					 the $1.75 rate (see section
					 642.4 
					 of this Part).
Footnotes
* Since the mortgaged property is principally improved by a
					 one-family residence, the $10,000 exclusion for purposes of the additional tax
					 is allowed. (See section 642[b] of this Part for information regarding the
					 $10,000 exclusion.)
** Since the mortgaged property is a one-family residence,
					 Bank Z is required to pay the special additional tax (see section
					 642.3[c] 
					 of this Part).
*** Since the mortgage covers property which is not
					 strictly a one-, two-, or three-family house or an individual residential
					 condominium unit and the amount secured is $500,000 or more, the City of New
					 York tax is computed using the highest rate (see section
					 642.4[a] 
					 of this Part).