View Document - Unofficial New York Codes, Rules and Regulations

20 CRR-NY 651.2NY-CRR

STATE COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK

TITLE 20. DEPARTMENT OF TAXATION AND FINANCE

CHAPTER IV. SALES AND USE AND OTHER MISCELLANEOUS TAXES

SUBCHAPTER D. MORTGAGE RECORDING TAXES

PART 651. CREDIT ALLOWED FOR MORTGAGE TAX PAID TO FIRST PURCHASERS OF CONDOMINIUM UNITS

20 CRR-NY 651.2

651.2 Computation of credit.

Real Property Law, § 339ee

The amount of credit as described in section 651.1 of this Part, is determined by multiplying the basic tax and, where applicable, the additional tax, the City of New York tax, the City of Yonkers tax and the Broome County tax paid upon the recording of such a construction or blanket mortgage, by the purchaser's pro rata percentage of interest in the common elements of the condominium.

Example 1:

A $1 million construction mortgage on real property located in New York City is recorded on January 1, 1991. The proceeds of the mortgage are applied to the construction of a building, which consists of 10 residential condominium units. Each unit is allocated 10% of the common elements as provided by the condominium declaration. Upon the recording of the construction mortgage $5000 of basic tax, $2500 of additional tax, and $17,500 of City of New York tax was paid.

the first unit in the newly constructed building is sold on August 1, 1991. The purchaser, Mr. Jones, borrows $400,000 from Bank X to finance his purchase, and gives a mortgage to Bank X as security for the amount borrowed. When the $400,000 mortgage is recorded, the taxes due and credit are computed as follows:

Basic tax on $400,000 mortgage	$2,000
Less: Credit allowed against basic tax (10 percent × $5000)	500
Basic tax due		1,500
Additional tax on $400,000 mortgage	$1,000
Less:^* Exclusion for first $10,000 of mortgage debt	25
Balance	975
Less: Credit allowed against additional tax (10 percent × 2500)	250
Additional tax due		725
Special additional tax on $400,000 mortgage (no credit allowed)		1,000^**
City of New York tax on $400,000 mortgage ($1 per $100 rate)	4,000
Less: Credit allowed against City of New York tax (10 percent × 17,500)	1,750
City of New York tax due		2,250
Total mortgage recording taxes due		$5,475

Since the real property covered by the mortgage is a one family residence, the first $10,000 of principal debt secured by the mortgage is deducted when computing the additional tax. (See section 642.2[b] of this Title.)

Since the $400,000 mortgage is of real property which is principally improved with a residential dwelling unit, Bank X, the mortgagee, must pay the special additional tax. (See section 642.2[b] of this Title.)

Example 2:

Same facts as in Example 1, except that the first unit in the building is sold on February 1, 1993. Since the first unit is sold more than two years after the construction mortgage was recorded, no credit is allowed.

Example 3:

Same facts as in Example 1, except that the construction mortgage was recorded on May 1, 1989. Since the construction mortgage was recorded prior to July 1, 1989, the credit is allowed regardless of the fact that the first unit of the condominium is sold more than two years after the date that the construction mortgage was recorded.

Also, the City of New York tax payable on the recording of the construction mortgage would be $12,500 based on the rate in effect on May 1, 1989, resulting in the credit with respect to such tax being $1,250 (10 percent × 12,500).

Footnotes

20 CRR-NY 651.2

Current through September 30, 2022

End of Document

IMPORTANT NOTE REGARDING CONTENT CURRENCY: The "Current through" date indicated immediately above is the date of the most recently produced official NYCRR supplement covering this rule section. For later updates to this section, if any, please: consult editions of the NYS Register published after this date; or contact the NYS Department of State Division of Administrative Rules at [email protected]. See Help for additional information on the currency of this unofficial version of NYS Rules.