Mortgage Tax Expansion: New York’s Commercial Real Estate Industry Is In The Crosshairs!

Cash Cow, Easy Money, Low-Hanging Fruit, Meal Ticket, Golden Goose…

These are just some of the words and phrases to describe how the real estate industry in New York State and New York City in particular is viewed by the powers-that-be in Albany and City Hall!

And of course it’s not just the developers and building owners that get leaned on for money, but often the buyers of real estate as well.

And in many of those cases the result can only be described as regressive taxation. A perfect example of this would be the Tax Map Verification Letter mandate in Nassau County that is nothing short of a money grab. Or, the hike in the transfer tax and mansion tax that basically impacted only New York City (read more here).

Taxes disguised as fees and straight-out taxes on the real estate sector can often be done with little backlash because the constituency is somewhat small with many of its members viewed as 1%’ers who can afford higher taxes and deserve to pay them. In reality, however, the majority of those who own rental properties are not the wealthy, but small landlords (read more here).

Despite the fact that massive sums of money will likely be arriving from Washington in the form of a bailout, new levies have been proposed for the commercial real estate industry in New York. Its’s a ‘proposal to expand the scope of New York’s tax of 2.8% on substantial mortgages recorded in New York City. That’s one of the highest mortgage tax rates in the United States.

Now some State legislators want to extend the same 2.8% tax to mezzanine loans and preferred equity investments, two structures that often provide additional capital for larger projects, especially new development…‘

The article at the link below, ‘A New Tax For New York’s Commercial Real Estate Industry?’, written by Joshua Stein from the commercial real estate law firm Joshua Stein PLLC, provides a great overview of the issue and the story.

Mortgage Tax Expansion: New York’s Commercial Real Estate Industry Is In The Crosshairs!