New York Consolidated Laws, Tax Law - TAX § 255. Supplemental mortgages

1. (a)(i) If subsequent to the recording of a mortgage on which all taxes, if any, accrued under this article have been paid, a supplemental instrument or mortgage is recorded for the purpose of correcting or perfecting any recorded mortgage, or pursuant to some provision or covenant therein, or an additional mortgage is recorded imposing the lien thereof upon property not originally covered by or not described in such recorded primary mortgage for the purpose of securing the principal indebtedness which is or under any contingency may be secured by such recorded primary mortgage, such additional instrument or mortgage shall not be subject to taxation under this article, except as otherwise provided in paragraph (b) of this subdivision, unless it creates or secures a new or further indebtedness or obligation other than the principal indebtedness or obligation secured by or which under any contingency may be secured by the recorded primary mortgage, in which case, a tax is imposed as provided by section two hundred and fifty-three of this article on such new or further indebtedness or obligation.

(ii) Notwithstanding any provision to the contrary in subparagraph (i) of this paragraph, the taxes imposed by or pursuant to the authority of this article shall apply to the recording of a spreading agreement or additional mortgage which imposes the lien thereof upon real property located in any city in the state having a population of one million or more and not originally covered by or described in a recorded primary mortgage, unless the real property that becomes subject to the lien of such spreading agreement or additional mortgage is owned by the mortgagor of the real property subject to the lien of such recorded primary mortgage.  If the commissioner of taxation and finance finds that transfers of one or both of such properties in connection with the recording of the spreading agreement or additional mortgage have been undertaken for the purpose of avoiding or evading the application of this paragraph rather than solely for an independent business or financial purpose, such commissioner may disregard such transfers.  For purposes of this subparagraph, there shall be a presumption that all transfers of one or both of such properties to related parties within the twelve-month period preceding the recording of such spreading agreement or additional mortgage have been undertaken for tax avoidance or evasion purposes and such presumption may be rebutted only with clear and convincing evidence to the contrary.  For this purpose, the term “related” shall have the same meaning as in paragraph (b) of subdivision two of section two hundred fifty-three-a of this article except that references to “fifty percent” in such paragraph (b) shall be read as “twenty-five percent”.

(b) Notwithstanding any provision to the contrary in paragraph (a) of this subdivision, taxes are imposed at the rates specified in paragraph (a) of subdivision two of section two hundred fifty-three of this chapter for each one hundred dollars and each remaining major fraction thereof of principal indebtedness or obligation secured by or which under any contingency may be secured by a supplemental instrument or additional mortgage, whether or not there is any new or further indebtedness or obligation other than the principal indebtedness or obligation secured by the recorded primary mortgage, where (i) the supplemental instrument or additional mortgage imposes the lien of a recorded mortgage upon real property not previously subject to the mortgage or where an additional mortgage upon such additional property is recorded as additional or substitute security for indebtedness or obligation already secured by a recorded mortgage and such property is situated in a county where the tax imposed by such paragraph (a) is in effect and (ii) the recorded primary mortgage was on real property situated in a county which had suspended the tax imposed by such paragraph (a) and the mortgage was recorded without payment of such tax.  The taxes imposed by this subdivision shall be distributed pursuant to section two hundred sixty-one of this chapter in the same manner as a tax imposed by subdivision two of section two hundred fifty-three of this chapter.

(c) The taxes imposed by this section shall be paid to the proper recording officer at the time the supplemental instrument or additional mortgage is recorded.

2. (a) If, at the time of recording such instrument or additional mortgage, any exemption is claimed under this section, there shall be filed with the recording officer and preserved in his office a statement under oath of the facts on which such claim for exemption is based.  The determination of the recording officer upon the question of exemption shall be reviewable by the tax commission.

(b) If an exemption is claimed under this section, at any time after such instrument or additional mortgage is recorded and tax paid, there shall be filed with the tax commission, as part of the application for refund a statement under oath of the facts on which such claim for exemption is based.  A copy of the order of refund of the tax commission shall likewise be filed with the recording officer and preserved in his office.


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