Do I have to pay transfer tax on a refinance in NY?

Do I have to pay transfer tax on a refinance in NY?

New York homeowners looking to refinance an existing mortgage don’t have to pay the state’s mortgage recording tax all over again. Here’s why: in order to skip the tax when switching lenders, borrowers must arrange for their existing lender to assign, or transfer, the mortgage to the new lender.

What does both RPTT and Rett mean?

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Definition. Both RPTT and RETT are taxes that apply to real property transfers, when the ownership is more than 50% transferred, granted, assigned or surrendered.

What is CEMA in NY?

The NY CEMA enables Borrowers with Mortgages secured by property located in New York to reduce the amount of Mortgage recording tax paid in connection with the refinance. Since tax on the outstanding Mortgage balance has already been paid, the Mortgage tax is waived on that amount.

Who pays mortgage recording tax in NY?

Taxes, generally paid by the buyer/borrower, are due when the mortgage is recorded. On residential property worth $500,000 or less, the tax is 2.05%. On property of $500,001 and above, the rate rises to 2.175%. In each case, the mortgage lender pays 0.25% of the tax while the borrower pays the rest.

How much is NYS mortgage transfer tax?

The mortgage recording tax requires purchasers to pay 1.8% on mortgage amounts under $500,000 and 1.925% on mortgage amounts above $500,000 in NYC (this includes the recording tax for both New York City and New York State). NY state imposes a mortgage tax of 0.5%.

Is mortgage recording tax deductible in New York?

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Is The New York Mortgage Recording Tax Deductible? The mortgage recording tax is not deductible in the way that real estate property taxes are on a primary residence or investment property. However, it does increase your cost basis for the property.

Is mortgage tax the same as transfer tax?

A transfer tax is the city, county or state’s tax on any change in ownership of real estate. A recording fee is normally a small flat amount while mortgage recording taxes are a percentage of the sale price, like transfer taxes.

Who pays title company fees at closing?

The home buyer’s escrow funds end up paying for both the home owner’s and lender’s policies. Upon closing, the cost of the home owner’s title insurance policy is added to the seller’s settlement statement, and the lender’s title insurance policy is covered by the buyer before closing.

Is NY transfer tax deductible?

It is important to note that these transfer taxes are not deductible as real property taxes; rather, buyers will add them to the cost basis of the property, and sellers will use the expense to reduce the amount realized on the sale.