February 1, 2017 – Elimination of IDA Exemption for the Additional Mortgage Tax Update

February 1, 2017, Governor Cuomo signed a bill (A374 / S979) that changed the expiration date of a portion of the Industrial Development Agency (IDA) mortgage tax exemption to June 30, 2017. The bill removing a portion of the mortgage tax exemption initially went into effect for mortgages recorded on and after September 30, 2016. As a result of the bill the IDA will be entitled to a full mortgage tax exemption until June 30, 2016. The Senate bill amended Tax Section 253(2) (a) to eliminate the exemption from the additional mortgage tax of $.25 per $100 of mortgage debt ** (or $.30 per $100, depending on county) in mortgage transactions involving the IDA and other agencies or organizations created under the General Municipal Law or Public Authorities Law. Therefore the FULL IDA Mortgage Tax exemption is in effect as of February 2, 2017, and will expire on June 30, 2017.

Under the new law, EFFECTIVE for mortgages recorded on and after JULY 1, 2017, a mortgage of real property executed, given, made, transferred, or assigned by or to an IDA, an agent of an IDA, or an entity receiving financial assistance from an IDA, is not exempt from the additional mortgage recording tax imposed by Tax Law section 253(2) when the real property that is subject to the mortgage is located in a county that is part of a transportation district.

If the additional mortgage recording tax was paid on an IDA mortgage recorded on or after September 30, 2016, but prior to July 1, 2017, a taxpayer may claim a refund by filing Form MT-15.1, “Mortgage Recording Tax Claim for Refund”.


** New York State Mortgage tax consists of three taxes, the basic tax of $.50 per $100 of mortgage debt, the special additional tax of $.25 per $100, the additional tax of $.25 per $100 ($.30 per $100 in the five boroughs of New York), and a local tax which varies by county.