New York mortgage recording tax on commercial property
New York taxes the recording of a mortgage, not the sale of the property. Under NY Tax Law §253, commercial mortgages of $500,000 or more in New York City owe a combined 2.8% of the mortgage amount; counties outside the city typically run 1% to 1.3%. Because the tax is levied on the loan amount, a $10 million NYC mortgage generates roughly $280,000 in recording tax before any other closing cost.
How the rate is built, component by component
What reads as "one tax" on a closing statement is actually several statutory components stacked together under NY Tax Law §253. The exact combination that applies depends on the county and, within New York City, the loan size:
| Component | Approx. rate | Applies where |
|---|---|---|
| Basic tax | $0.50 per $100 | Statewide |
| Additional tax | ~$0.25–$0.30 per $100 | Most counties, rate varies |
| Special additional tax | $0.25 per $100 | NYC and MCTD counties |
| NYC local tax | Up to 2.05% on commercial ≥$500k | New York City only |
Stacked together, a commercial mortgage of $500,000 or more recorded in New York City lands at a combined 2.8%. Outside the five boroughs, the NYC local tax component drops away entirely, which is why county rates settle in the 1% to 1.3% range depending on which of the statewide add-on taxes apply locally.
Who technically pays which piece
Most of the combined rate is a straightforward borrower obligation — it is a cost of recording the mortgage the borrower is granting. One narrow slice, the "special additional" tax component in NYC and the Metropolitan Commuter Transportation District, is statutorily a lender obligation. In practice this rarely changes what a borrower pays: commercial lenders almost universally require the borrower to reimburse this component as a loan condition, so it shows up on the borrower's closing statement either way. Treat the full combined rate as the borrower's number when budgeting a deal, and confirm the split in the term sheet rather than assuming.
It taxes the mortgage, not the price
A distinction worth stating plainly: recording tax is calculated on the dollar amount secured by the mortgage being recorded, not on the property's purchase price or appraised value. A $20 million acquisition financed with a $12 million mortgage owes recording tax on $12 million. An all-cash purchase with no mortgage recorded owes none at all — which is why cash buyers and highly equity-heavy deals skip this cost entirely, regardless of deal size.
Cooperative apartment financing works differently because a co-op loan is typically secured by stock shares and a proprietary lease rather than a recorded mortgage against real property — a structural difference that can eliminate recording tax exposure on that financing. That regime is specific to co-ops and doesn't extend to commercial CRE mortgages, so it's mentioned here only to flag the distinction, not as a workaround available on commercial deals.
Structures that reduce the tax bill
Because the tax attaches to the act of recording, the primary lever is avoiding a full new recording where possible:
- CEMA on refinances. The new lender takes assignment of the existing mortgage instead of satisfying it, and records a smaller gap mortgage for the new money only — tax applies to the gap, not the full new loan. See how CEMA works on a commercial refinance for the mechanics, costs, and when lenders decline to participate.
- Loan assumption. A buyer assuming an existing mortgage rather than the seller satisfying it and the buyer recording new financing can avoid a fresh recording, though assumption requires the existing lender's consent and is far less common than CEMA in commercial deals.
- Wraparound mortgages — proceed with caution. A wraparound structure layers new financing "around" an existing loan without satisfying it, which can affect recording tax exposure, but it carries due-on-sale, priority, and lender-consent risk that generally makes it a specialist structure rather than a routine cost-saving tool. Treat it as something to discuss with counsel, not a default option.
Calculate the tax on your deal
The closing cost calculator applies these components by county and loan size, including the CEMA-adjusted figure on refinances. For the rest of a commercial closing statement, see commercial closing costs in NY & FL.
Frequently asked questions
What is New York's mortgage recording tax rate on commercial property?
In New York City, the combined rate on commercial mortgages of $500,000 or more is 2.8% of the mortgage amount, made up of several statutory components layered on top of each other. Outside New York City, county rates generally run 1% to 1.3%, since they don't include NYC's additional city-level components. The rate applies to the mortgage amount, not the property's purchase price or value.
Is mortgage recording tax based on the purchase price or the loan amount?
The loan amount. NY Tax Law §253 taxes the act of recording a mortgage, so the tax base is whatever amount is secured by that mortgage — not the property's sale price or appraised value. An all-cash purchase with no mortgage recorded owes no mortgage recording tax at all, regardless of price.
Who is legally responsible for paying mortgage recording tax — borrower or lender?
The statute splits the tax into components, and one small piece (the 'special additional' tax in NYC, typically 0.25%) is technically a lender obligation that many commercial lenders contractually pass through to the borrower as a condition of the loan. In practice, borrowers should assume they're paying the full combined rate unless the term sheet says otherwise.
Are there any exemptions from New York mortgage recording tax?
Cooperative apartment financing is taxed differently because a co-op loan is typically secured by shares and a proprietary lease rather than a recorded real property mortgage, which can change or eliminate recording tax exposure — that's a distinct enough regime to need its own analysis and isn't a commercial CRE scenario. Government and certain exempt-entity borrowers may also have exemptions; confirm with counsel rather than assuming.
What is the main way commercial borrowers reduce New York mortgage recording tax?
The CEMA (Consolidation, Extension and Modification Agreement) structure, used on refinances. Instead of satisfying the old mortgage and recording a new one for the full amount, the new lender takes assignment of the old mortgage and records a smaller gap mortgage for the new money only — so tax is due on the gap, not the full new loan. See how the mechanics and costs work in practice.
Reviewed by the Relendi Team · Updated 2026-07-11. Educational content, not legal or tax advice — statutes cited above govern; confirm current rates with counsel at closing.