State Legislature Considers Lifting Mortgage Tax

Calling home ownership a “big part of the American dream,” State Senator Peter Harckham (D, Mt. Kisco) has introduced legislation that would exempt first-time homebuyers from paying the mortgage recording tax that municipalities impose for legally recording a deed, mortgage or other documents related to a loan for a home purchase.

The latest data indicates the median sale price of a home in New York last year was $642,500, and with a typical 10 percent down payment, that would result in a $578,000 mortgage. If enacted, Harckham’s bill would save a first-time homebuyer $5,780 in costs for a one percent mortgage recording tax, paid typically at the closing.

 Harckham said, “by exempting first-time homebuyers from paying their mortgage tax, we’ll be making this milestone achievement more affordable while also re-energizing our communities.”

Mortgage recording tax rates vary statewide, with most municipalities charging about one percent of the mortgage. However, the mortgage recording tax in the 40th Senate District, which Harckham represents, is currently between 1.05 percent in Putnam County and 1.3 percent in both Rockland and Westchester counties, excluding Yonkers, which charges 1.8 percent.

In New York City, the mortgage tax is 2.05 percent for mortgages less than $500,000 and 2.175 percent for mortgages more than $500,000. A portion of the mortgage recording tax collected in Putnam, New York City and six other neighboring counties goes to the Metropolitan Transportation Authority.

According to the State Comptroller’s Office, New York has the lowest homeownership rate in the U.S., with only 53.6 percent of the population owning a home in mid-2022 versus 66 percent nationally.