Trade Organizations Cry Foul Over Mortgage-Recording Tax Hike

WCBR officials noted that the proposed increase comes on the heels of a $2.50-per-$1,000 increase in the mortgage-recording tax imposed last year at the behest of Westchester County government. That hike was used to offset a $70-million county-budget shortfall.

At present, the mortgage-recording tax is $12.50 per $1,000 financed in Westchester County. Under the governor's plan, the Metropolitan Transportation Authority would receive an additional $1 per $1,000 solely in its 12-county region, bringing the total mortgage recording tax to $13.50 in Westchester County and at least $11 in the other counties the MTA services, WCBR officials note.

The City of Yonkers imposes an additional $5 per $1,000 to fund city programs, so the mortgage tax there is currently $17.50 per $1,000. That, of course, would go up to $18.50 if the governor's plan is approved by the State Legislature.

"It is incomprehensible that, in his budget presentation, Gov. Pataki talks about the need for more affordable housing, yet his budget language increases the state's archaic tax for the 'privilege' of obtaining a mortgage," charges Nysar president Gary Kenline. "His statement, 'let's make homeownership in New York more affordable' certainly rings hollow to homebuyers in the MTA region."

WCBR CEO P. Gilbert Mercurio is in agreement. "The governor's proposal will bring the mortgage-recording tax in Westchester to a whopping $13.50 per $1,000 of filed mortgage," he states, "which works out to $2,700 on a typical $200,000 residential mortgage. Commercial borrowers with much larger mortgages will pay far higher, which belies the governor's stance that he's trying to make New York State more economically competitive. To the contrary, the existing mortgage tax and the proposed increase are a direct attack on housing affordability and commercial investment that will do us grievous harm in the long run."

On a commercial mortgage of $500,000, the current mortgage recording tax is $6,250. If the governor has his way, the price tag would rise by $500 to $6,750.

New York is the only state that actually taxes its citizens for obtaining a mortgage. "This is a tax that is long overdue for repeal, not expansion," says Kenline. "The governor cannot justify putting the cost of operating the MTA on the backs of homebuyers, particularly first-time homebuyers in a region where median home-sales prices range from $299,950 to $627,000."

At press time, GlobeSt.com was awaiting a response to the complaints lodged by realtors against the mortgage recording tax increase from Pataki.

"This is a real kick in the pants for us," comments Henry Fries, chairman of WCBR's Legislative, Political & Legal Affairs Committee. "We were hoping to roll back the increase they passed last year to balance the budget in Westchester. This weakens our hand with county government. The real estate industry is the only thing keeping the country afloat, not to mention the state and county, and eventually they are going to kill it."