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relief for refinancing

New legislation offers tax
relief for refinancing

Both houses of the New York State Legislature have approved a bill granting tax relief for home owners who refinance their mortgages, according to the Greater Rochester Association of Realtors Inc.
Thinking of refinancing your home? Then this piece of legislation is important because it will offer home owners the option of obtaining an assignment of mortgage and eliminating the mortgage- recording tax liability for anything more than the new debt obtained in refinancing an existing mortgage.
Many banks today are delivering only certificates of discharge; however, many banks also are taking the position that, when a customer chooses to refinance with a new bank, the first bank no longer is required to deliver an assignment of the mortgage.
The new law allows home owners who have paid off their mortgage as part of refinancing their property with a new bank to get either a certificate of discharge or an assignment of the mortgage. Individuals who are refinancing are being forced to have to pay a part of their mortgage-recording tax twice, not only on the amount being refinanced–the new debt–but also on the original mortgage debt as well. This results in home owners being hit with a double mortgage tax because they already were taxed when the original mortgage was taken out, most likely many years earlier.
Home owners who refinance under this new law will pay tax only on the new debt.
Previously, both houses of the Legislature approved similar legislation that would have eliminated the double hit from the mortgage-recording tax, but it was vetoed by then Gov. Mario Cuomo. The current bill is awaiting Gov. George Pataki’s signature, and once signed will go into effect 30 days later.

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