In a recent comprehensive article, Natalia Sishodia (https://sishodia.com/how-do-i-avoid-mortgage-recording-tax-in-ny/), lead NYC real estate attorney at Sishodia PLLC, breaks down methods to potentially avoid or reduce the mortgage recording tax in New York City. This tax, a significant part of closing costs for property purchasers, can be mitigated with informed strategies.
The NYC real estate attorney explains that purchasing property in the city often comes with considerable expenses beyond the property's cost. Closing costs, including application fees, origination costs, appraisals, and legal fees, can add up quickly. One such cost is the mortgage recording tax, which can be a significant expense for those financing their property purchases.
Natalia Sishodia says, "A skilled NYC real estate attorney can help prospective property purchasers understand their rights within the transaction and anticipate potential expenses."
Sishodia's article dives into the specifics of the mortgage recording tax, which both state and local governments collect in New York when a mortgage is financed. The borrower's portion of the tax can range from 1.80% to 1.825% of the loan amount, depending on the mortgage's total. This tax applies whether the property is being purchased or refinanced, adding a significant cost to the transaction.
"Understanding the nuances of the mortgage recording tax is essential," says Sishodia. "At Sishodia PLLC, our NYC real estate attorneys can offer the necessary legal guidance to navigate these complexities."
In her article, Sishodia highlights the Consolidation, Extension, and Modification Agreement (CEMA) as a potential solution to mitigate the mortgage recording tax. This specialized refinancing option, exclusive to New York residents, allows borrowers to pay the tax only on the difference between their current principal balance and the new loan amount. However, she notes that co-ops aren't eligible for CEMA loans, as owning shares in a co-op isn't considered the same as owning real estate.
"Through a CEMA loan, buyers can transfer an existing mortgage, consolidate it, and then amend it with a new mortgage," Sishodia explains. "This strategy allows buyers to pay tax on any difference between the buyer’s mortgage and the seller’s existing mortgage balance."
Purchasing and financing a co-op can also be a way to avoid the mortgage recording tax as co-ops are not considered real property and therefore, are not subject to the tax. Additionally, Sishodia points out that the mortgage recording tax can be greatly reduced or avoided in a refinance situation when the original lender agrees to assign the existing mortgage to the new lender.
The article underscores the importance of seeking the assistance of a seasoned NYC real estate attorney when purchasing property in the city. The experienced team at Sishodia PLLC, led by Natalia Sishodia, is dedicated to guiding clients throughout the entire transaction to ensure a smooth process and potential cost savings.
About Sishodia PLLC:
Sishodia PLLC is a top-rated law firm widely experienced in real estate law in New York City. Led by Natalia Sishodia, the team has years of experience in handling complex property matters and offers comprehensive legal guidance to clients in transactions, helping them understand their rights and anticipate potential expenses. The firm's commitment to providing high-quality service and nuanced advice has established them as one of the trusted legal partners in NYC's real estate landscape.
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Company Name: Sishodia PLLC
Contact Person: Natalia A. Sishodia
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Phone: (833) 616-4646
Address:600 Third Avenue 2nd Floor, 600 3rd Ave Second Floor, New York, NY 10016
City: New York
State: New York
Country: United States