N.Y. Tax Law § 255 — Supplemental mortgages

§ 255. Supplemental mortgages. 1. (a) (i) If subsequent to the\nrecording of a mortgage on which all taxes, if any, accrued under this\narticle have been paid, a supplemental instrument or mortgage is\nrecorded for the purpose of correcting or perfecting any recorded\nmortgage, or pursuant to some provision or covenant therein, or an\nadditional mortgage is recorded imposing the lien thereof upon property\nnot originally covered by or not described in such recorded primary\nmortgage for the purpose of securing the principal indebtedness which is\nor under any contingency may be secured by such recorded primary\nmortgage, such additional instrument or mortgage shall not be subject to\ntaxation under this article, except as otherwise provided in paragraph\n(b) of this subdivision, unless it creates or secures a new or further\nindebtedness or obligation other than the principal indebtedness or\nobligation secured by or which under any contingency may be secured by\nthe recorded primary mortgage, in which case, a tax is imposed as\nprovided by section two hundred and fifty-three of this article on such\nnew or further indebtedness or obligation.\n (ii) Notwithstanding any provision to the contrary in subparagraph (i)\nof this paragraph, the taxes imposed by or pursuant to the authority of\nthis article shall apply to the recording of a spreading agreement or\nadditional mortgage which imposes the lien thereof upon real property\nlocated in any city in the state having a population of one million or\nmore and not originally covered by or described in a recorded primary\nmortgage, unless the real property that becomes subject to the lien of\nsuch spreading agreement or additional mortgage is owned by the\nmortgagor of the real property subject to the lien of such recorded\nprimary mortgage. If the commissioner of taxation and finance finds that\ntransfers of one or both of such properties in connection with the\nrecording of the spreading agreement or additional mortgage have been\nundertaken for the purpose of avoiding or evading the application of\nthis paragraph rather than solely for an independent business or\nfinancial purpose, such commissioner may disregard such transfers. For\npurposes of this subparagraph, there shall be a presumption that all\ntransfers of one or both of such properties to related parties within\nthe twelve-month period preceding the recording of such spreading\nagreement or additional mortgage have been undertaken for tax avoidance\nor evasion purposes and such presumption may be rebutted only with clear\nand convincing evidence to the contrary. For this purpose, the term\n"related" shall have the same meaning as in paragraph (b) of subdivision\ntwo of section two hundred fifty-three-a of this article except that\nreferences to "fifty percent" in such paragraph (b) shall be read as\n"twenty-five percent".\n (b) Notwithstanding any provision to the contrary in paragraph (a) of\nthis subdivision, taxes are imposed at the rates specified in paragraph\n(a) of subdivision two of section two hundred fifty-three of this\nchapter for each one hundred dollars and each remaining major fraction\nthereof of principal indebtedness or obligation secured by or which\nunder any contingency may be secured by a supplemental instrument or\nadditional mortgage, whether or not there is any new or further\nindebtedness or obligation other than the principal indebtedness or\nobligation secured by the recorded primary mortgage, where (i) the\nsupplemental instrument or additional mortgage imposes the lien of a\nrecorded mortgage upon real property not previously subject to the\nmortgage or where an additional mortgage upon such additional property\nis recorded as additional or substitute security for indebtedness or\nobligation already secured by a recorded mortgage and such property is\nsituated in a county where the tax imposed by such paragraph (a) is in\neffect and (ii) the recorded primary mortgage was on real property\nsituated in a county which had suspended the tax imposed by such\nparagraph (a) and the mortgage was recorded without payment of such tax.\nThe taxes imposed by this subdivision shall be distributed pursuant to\nsection two hundred sixty-one of this chapter in the same manner as a\ntax imposed by subdivision two of section two hundred fifty-three of\nthis chapter.\n (c) The taxes imposed by this section shall be paid to the proper\nrecording officer at the time the supplemental instrument or additional\nmortgage is recorded.\n 2. (a) If, at the time of recording such instrument or additional\nmortgage, any exemption is claimed under this section, there shall be\nfiled with the recording officer and preserved in his office a statement\nunder oath of the facts on which such claim for exemption is based. The\ndetermination of the recording officer upon the question of exemption\nshall be reviewable by the tax commission.\n (b) If an exemption is claimed under this section, at any time after\nsuch instrument or additional mortgage is recorded and tax paid, there\nshall be filed with the tax commission, as part of the application for\nrefund a statement under oath of the facts on which such claim for\nexemption is based. A copy of the order of refund of the tax commission\nshall likewise be filed with the recording officer and preserved in his\noffice.\n