Current Mortgage Recording Tax Rates
As of now, the Mortgage Recording Tax rates for residential properties in New York City are as follows:
- Mortgages under $500,000: 2.05% total
- 0.50% goes to New York State.
- 1.55% goes to New York City.
- Mortgages of $500,000 or more: 2.175% total
- 0.625% goes to New York State.
- 1.55% goes to New York City.
The total tax is based on the amount of the loan, not the purchase price of the property.
How Is the Mortgage Recording Tax Calculated?
The MRT is applied to the full loan amount. For example:
- Loan Amount: $400,000
- Tax Rate: 2.05%
- Total Tax: $400,000 × 0.0205 = $8,200
- Loan Amount: $600,000
- Tax Rate: 2.175%
- Total Tax: $600,000 × 0.02175 = $13,050
These calculations illustrate how the tax increases with the loan size, making it a significant cost for buyers and refinancers in NYC.
Exemptions and Ways to Reduce the Tax
Certain situations can exempt or reduce the Mortgage Recording Tax liability:
- Co-op Apartments: Exempt because they are classified as personal property.
- CEMA (Consolidation, Extension, and Modification Agreement): Allows buyers or refinancers to pay the tax only on the new loan amount, reducing the total liability.
Understanding these options can help minimize closing costs.
Why Is the Mortgage Recording Tax Important?
The Mortgage Recording Tax is a significant part of closing costs for residential real estate transactions in NYC. Being aware of the current rates and exploring ways to reduce this tax can help buyers and homeowners better manage their finances.
If you’re planning a purchase or refinance, consult with a real estate attorney or mortgage expert to understand how these rates apply to your specific situation.
