Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, § 253-a, Administrative Code of the City of
New York, §§ 11-2601(d), 11-2601(e)
(a)
(1) In
addition to the taxes imposed by subdivisions 1, 1-a and 2 of section
253 of
the Tax Law, section
253-a of the Tax Law authorizes the City
of New York to impose the City of New York tax upon the recording of each
mortgage on real property located in whole or in part within such city. Section
11-2601 of the Administrative Code of the City of New York imposes such
tax.
(2) The rate of tax for each
$100 and each remaining fraction thereof of principal debt or obligation which
is, or under any contingency may be secured at the date of execution thereof or
at any time thereafter is as follows:
(i)
Where the amount of such principal debt or obligation is less than $500,000 the
rate of tax is one dollar.
(ii)
Where the amount of such principal debt or obligation is $500,000 or more and
the mortgage is of real property consisting only of a one-, two- or
three-family house or an individual residential condominium unit the rate of
tax is one dollar and 12 1/2 cents. For purposes of determining whether the
mortgage is of real property consisting only of a one-, two- or three-family
house or an individual residential condominium unit, the nature of the property
as of the date that the mortgage is executed must be used.
(iii) Where the amount of such principal debt
or obligation is $500,000 or more and the mortgage is of real property which
consists of other than a one-, two- or three-family house or an individual
residential condominium unit the rate of tax is $1.75.
(b)
Proof required.
(1) Whenever a mortgage of real property
located in New York City is recorded and the amount secured by the mortgage is
$500,000 or more, and is it is being claimed that the real property consists
only of a one-, two-, or three-family house or an individual residential
condominium unit, there shall be submitted, either in the mortgage instrument
or by separate affidavit by the mortgagor, the mortgagee or by any person who
has knowledge of the facts, a statement that the real property consists of such
type of residential property.
(2) A
statement in the mortgage that the real property is improved by a one-, or
two-family residence or dwelling, sufficient to claim the $10,000 deduction
from the additional tax, as provided in section
642.2(b)(2)
of this Part, is sufficient to satisfy the proof requirements of this
subdivision.
(c)
Determination of the applicable rate of the City of New York tax on
related transactions.
(1) The
principal debt or obligation which is, or under any contingency may be secured
at the date of execution or at any time thereafter of a mortgage on real
property located in such city, shall be aggregated with the principal debt or
obligation which is, or under any contingency may be secured at the date of
execution or at any time thereafter of any other mortgage on real property
located in such city, where such mortgages:
(i) form part of the same or related
transactions; and
(ii) have the
same or related mortgagors.
(2) If the commissioner finds that a mortgage
transaction or mortgage transactions has or have been formulated for the
purpose of avoiding or evading a rate of tax as provided under subdivision (a)
of this section, in excess of the lowest such authorized rate, rather than
solely for an independent business or financial purpose, the commissioner shall
treat all of the mortgages forming part of such transaction or transactions as
a single mortgage for the purpose of determining the applicable rate of
tax.
(3) It shall be presumed that
all mortgages offered for recording within a period of 12 consecutive months
having the same or related mortgagors are part of a related transaction, and
shall be treated as a single mortgage for the purpose of determining the
applicable rate of tax. Such presumption may be rebutted only with clear and
convincing evidence to the contrary.
(4) The term
related, when
used in this subdivision with reference to mortgagors, shall include but not be
limited to:
(i) members of a family, including
spouses, ancestors, lineal descendants, and brothers and sisters (whether by
whole or half blood);
(ii) a
shareholder and a corporation where more than 50 percent of the value of the
outstanding stock of such corporation is owned or controlled directly or
indirectly by such shareholder;
(iii) a partner and a partnership where more
than 50 percent of the capital or profits in such partnership is owned or
controlled directly or indirectly by such partner;
(iv) a beneficiary and a trust where more
than 50 percent of the beneficial interest in such trust is owned or controlled
directly or indirectly by such beneficiary;
(v) two or more corporations, partnerships,
associations, or trusts, or any combination thereof, which are owned or
controlled, either directly or indirectly, by the same person, corporation or
other entity, or interests; and
(vi) a grantor of a trust and the
trust.
(d)
Except as otherwise provided in these regulations, the City of New York tax is
administered and collected in the same manner as the basic tax described in
section
642.1
of this Part.
(e) See section
645.2(d)
of this Title for information on the recording of a supplemental mortgage
created for the purpose of providing additional or further security for the
payment of the principal debt or obligation secured by a prior recorded primary
mortgage by spreading the existing lien of the prior recorded mortgage or
imposing a new lien on real property located in the City of New York.
(f) Where real property covered by a mortgage
subject to the tax described in this section is situated in whole within New
York State but partly within and without the City of New York, the amount of
City of New York tax due and payable upon the recording of the mortgage shall
be determined in a manner similar to that described in section
642.2(d)
of this part.
(g) Where real
property covered by a mortgage subject to the tax described in this section is
situated both within New York City and without New York State, the amount of
City of New York tax due and payable shall be determined in a manner similar to
that described in Part 649 of this Title.
