How to Avoid Paying the NYC Mortgage Recording Tax

By: ROS Team

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The real estate world has a language all its own. It may seem scary at first, but if you do a little research to get a better understanding of what things mean beforehand, the terms and phrases will become less intimidating. If you live in New York City, one of the terms you may run across is NYC mortgage recording tax.

The State of New York imposes a mortgage recording tax on newly purchased property in NYC. This means that you will need to factor in the recording tax when calculating the total amount of the home loan that will be used to finance the property. We’ll provide an overview of the NYC mortgage recording tax in this article and look at some frequently asked questions when related to this unique tax.

What is the New York Mortgage Recording Tax?

The mortgage recording tax is a fee assessed by the State of New York for registering the purchase of a house or the sale of land in the state. The government uses these funds to maintain the public record.

Who Pays the NYC Mortgage Recording Tax?

States record mortgages and tax liens against properties and charge a recording fee. The recording fee helps fund the database that New Yorkers can use to access property information.

Real estate transactions include closing costs that include these recording fees along with appraisal fees, title search fees and insurance, land surveys, and any other taxes associated with the property’s purchase.

The buyer is usually responsible for paying the recording fees. The amount of the charges will depend on the type and complexity of the real estate transaction.

Who Pays the NYC Mortgage Recording Tax
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The recording tax fluctuates, primarily due to the size of the land record instrument. A land record instrument is a document that lists who owns the property’s title.  It is required for making deeds and other real estate documents part of the public record. It also helps people know who owns the land they intend to buy or sell.

The fees for land record instruments are not fixed; in one instance it might cost $80 to obtain a copy of the first page of the instrument and $5 for each subsequent page, while in another instance there may be a $100 fee to get a copy of the first page of the instrument and $2 for each additional page.

Property information is kept in a database that not only includes recording fees but also other important records like property deeds, property surveys, and title changes.

New York Mortgage Recording Tax Calculator

In NYC, home loans that are less than $500,000 are assessed a mortgage recording tax of 1.8% of the total sales price. Loans for more than $500,000 are assessed a tax of 1.925%. The recording tax is a bit different for commercial property transactions – commercial property is assessed a recording tax of 2.55%.

You can easily calculate your mortgage recording tax. We’ve included an example to help illustrate how the calculation is done using a home valued at $2,000,000:

  • Purchase Price: $2,000,000
  • Down Payment: $400,000 (20%)
  • Amount of Mortgage: $1,600,000 (80%)
  • Mortgage Recording Tax: $30,770 (1.925% of the mortgage amount)

Assuming you are putting down 20%, it’s normal to consider the mortgage recording tax as slightly higher than 1.5% of the purchase value.

Avoid Paying the NYC Mortgage Tax

How to Avoid Paying the NYC Mortgage Tax

There are ways to escape paying the NYC mortgage tax, which we’ve listed below:

1. Buy a Co-op

Purchasing a co-op is the least demanding and most straightforward way to avoid paying a mortgage recording tax. Remember that the mortgage recording tax covers the cost of recording the property in the state’s property database. This is of great worth since you’re buying a personal property when you purchase a condo or studio.

When buying co-ops, you’re buying shares of the building to live in a particular unit. There is no mortgage recording tax assessed on shares and leases as these are personal property; the mortgage tax only applies to real property.

Although there are no current plans to develop legislation that will counter this loophole, a 2015 study conducted by New York’s Independent Budget Office concluded that closing this loophole would raise about $150 million every year.


Consolidation, Extension or Modification Agreement, or CEMA, prevents the mortgage recording tax altogether, but it is a more complicated option than simply buying a co-op. With CEMA, you’re taking control of the current owner’s mortgage. This is beneficial for you because the owner has already paid the mortgage recording tax, so you won’t be assessed the tax.

There are a few prerequisites before CEMA can become a feasible option:

  • There should be an outstanding mortgage on the property;
  • The seller should agree to cooperate; or
  • The seller’s bank and your bank should also cooperate

You should discuss a CEMA with the seller as soon as possible. Ideally, you would incorporate it with your offer so that the seller will know you’re interested in using it as part of the sale. In fact, the seller may be willing to split the mortgage recording tax savings with you.

Keep in mind that CEMA doesn’t completely exempt you from paying the NYC mortgage tax. You will likely still need a loan to cover the remaining costs.

Related Article: New York CEMA Loan And What Are Its Requirements

3. Mortgage Assumption

Mortgage assumption is an unpopular loophole to the NYC mortgage tax.

The mortgage assumption means the buyer is taking over the current borrower’s role as the primary payor of the loan. The new buyer would be responsible for making monthly payments, just as the initial borrower did, at the same interest rate, until the loan is repaid. Since there is no change to the loan other than the borrower’s name, the buyer has zero tax to pay.

The mortgage assumption is a less common approach than the other strategies because it incurs a 1% fee on the sales price.

Mortgage Assumption
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How is the NYC Mortgage Tax Filed?

Manhattan, Brooklyn, Queens, and the Bronx are all under the governing domain of the New York City Register Office, which collects the mortgage recording tax. In contrast, the Richmond County Clerk manages the mortgage recording tax in Staten Island.

The New York City Register Office has a digital database called the Automated City Register Information System (ACRIS ) that maintains all public property records in its jurisdiction. Staten Island properties have to be recorded in person at the Richmond County Clerk’s Office.  The New York mortgage recording tax should be reported on a Form MT-15 and filed with the appropriate agency.

Do You Have to Pay New York State Mortgage Tax When Refinancing Your Mortgage?

You don’t always have to pay the mortgage recording tax when refinancing a mortgage. Maintaining communication with your lender can help minimize the chances of errors during the refinancing process that could trigger an unnecessary mortgage recording tax.

On the contrary, a home equity line of credit (HELOC) requires that the New York mortgage recording tax be applied. In addition to this, the tax applies to the sum of the accessible credit line, not just the amount you plan to withdraw.

Is the NYC Mortgage Tax Deductible?

You cannot deduct what you pay in New York mortgage recording taxes on your federal tax return the way you deduct real estate property taxes. However, when you sell the property, you’ll be shielded from paying what you would have had to pay in capital gains taxes. Consult with an accountant for more information on how you can reduce your annual tax liability.


The mortgage recording tax in NYC is used to maintain a record of the city’s real estate transactions. NYC’s public record system is well-maintained, and the database is accessible to all New Yorkers. However, if you are looking to avoid paying the mortgage recording tax through CEMA or mortgage assumption. Make sure to consult with a real estate broker or an attorney.