New York State Legislature Reintroduces Bills to Extend Mortgage Recording Tax to Mezzanine Debt and Preferred Equity

Legislative building

The bills are currently in committee stage.

March 15, 2021
Steven E. Coury & Marissa Levy - White and Williams

Companion bills in the New York State Legislature, Assembly Bill No. A3139 and Senate Bill No. S3074, if enacted, would subject mezzanine loans and preferred equity investments to the same recording and taxation requirements placed on mortgages.

The bills were reintroduced last month after similar bills (S7231/A9041) were introduced in the 2019-2020 legislative session. The prior bills died in committee when last year’s legislative session adjourned.

As discussed in our prior alert, the proposed bills would require: (1) a financing statement evidencing any mezzanine debt and/or preferred equity investments related to real property to be filed in the county in which the real property is located and (2) a recording tax, at the same rate as the applicable mortgage recording tax rate (2.80% for commercial mortgages over $500,000 in New York City), to be imposed on the amount of the debt and/or investment at the time the financing statement is filed. The bills contain a limited carve-out for owner-occupied residential cooperatives.

Reprinted courtesy of Steven E. Coury, White and Williams and Marissa Levy, White and Williams

Mr. Coury may be contacted at courys@whiteandwilliams.com
Ms. Levy may be contacted at levmp@whiteandwilliams.com



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