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Limits tax on refinanced mortgages to the difference between the indebtedness secured by the new mortgage and the remaining indebtedness secured on the former mortgage
In Assembly Committee · Ways And Means · Sponsor Alan Maisel
Full text
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Sponsor's memo
BILL NUMBER:S3048
Title of bill
An act to amend the tax law, in relation to limiting the tax imposed on refinanced mortgages to the difference between the total indebtedness secured by the new mortgage and the remaining indebtedness secured by the former mortgage
Purpose or general idea of bill
To address the concerns of real property owners double taxation. This bill would allow real property owners who refinance their mortgages to be taxed on the remaining amount of indebtedness instead of the original amount of the mortgage.
Justification
Real property owners, especially homeowners, should not be punished for taking advantage of refinancing options. Under the current law, real property owners, in essence, are being taxed twice: first on the original amount of the mortgage and second on the new mortgage after refinancing. This legislation will alleviate this burden by taxing only the remaining amount of indebtedness.
The mortgage refinancing boom of the past few years reached a high-water mark in 2003. Assuming that the pace of refinancing in the second half of 2003 was roughly equal to that of the first half, nearly 12 million mortgage loans were refinanced in 2003 on the heels of more than 8 million in 2002. With about 75 million home-owning households in the United States, 580 of which have mortgages, this means that more than one out of every four home mortgages in the country was refinanced in 2003.
By refinancing their mortgages, homeowners can significantly reduce their monthly mortgage payments, freeing up cash for other purposes. Moreover, it has become increasingly common, particularly in this period of rapid home price appreciation, for refinancing homeowners to take on a new mortgage for a larger amount than the loan they pay off. In short, there is no reason that real property owners should have to pay the same tax twice.
Prior legislative history
A.7806 of 2008. A.11828 of 2006 (MAISEL)
Fiscal implications
Undetermined.
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become a law, and shall apply to the calculation of amount of tax due on mortgages executed on and after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.