The Suffolk County mortgage recording tax is 1.05% of the mortgage principal, collected by the County Clerk when the mortgage is recorded. On most one- and two-family home loans, the borrower pays about 0.80% and the lender pays 0.25%, so a $400,000 mortgage generates roughly $3,170 in tax for the borrower after the residential exclusion. The rate sits slightly above counties outside the Metropolitan Commuter Transportation District, and the tax generally cannot be rolled into the loan, which is why it catches first-time buyers off guard at closing.1New York State Department of Taxation and Finance. Metropolitan Commuter Transportation Mobility Tax
How the 1.05% Is Built
The total rate is three separate state taxes stacked together:2New York State Senate. New York Tax Code 253 – Recording Tax
- Basic tax of 0.50% of the mortgage principal.
- Special additional tax of 0.25%.
- Additional tax of 0.30%. Suffolk pays this higher figure because it sits inside the Metropolitan Commuter Transportation District; counties outside the district pay 0.25% on this component.
The percentages are the same whether the property is a house, a condo, a commercial building, or a multi-family with three or more units.3Suffolk County Clerk. Mortgage Tax – County Clerk What changes with property type is who pays which slice and whether the residential exclusion is available.
Who Pays What
For residential properties with six or fewer units, New York law splits the bill. The lender covers the 0.25% special additional tax, and the borrower pays the remaining 0.80%.2New York State Senate. New York Tax Code 253 – Recording Tax On a $400,000 mortgage that works out to about $3,170 for the borrower and $1,000 for the lender.
For commercial properties, or any residential building with seven or more units, the borrower pays the full 1.05%. The lender-pays slice only applies to small residential dwellings.2New York State Senate. New York Tax Code 253 – Recording Tax
The $10,000 Residential Exclusion
When the mortgaged property is a one- or two-family home, the first $10,000 of principal is excluded from the 0.30% additional tax component. The savings come out to exactly $30.4New York State Department of Taxation and Finance. $10,000 Residential Property Exclusion on Certain Mortgages The exclusion does not reach condos in buildings with three or more units, co-ops, or commercial property.
There is a wrinkle on refinances. If the original mortgage already secured $10,000 or more, a modified or consolidated mortgage replacing it does not get another exclusion.4New York State Department of Taxation and Finance. $10,000 Residential Property Exclusion on Certain Mortgages It is a one-time benefit on the original recording.
Cutting the Tax When You Refinance or Buy
Paying 1.05% on a full refinance balance means paying tax a second time on money the lender already taxed once. Two tools can prevent that.
Section 255 Credit
Under Section 255 of the New York Tax Law, a borrower recording a supplemental or replacement mortgage owes tax only on the new money borrowed beyond the unpaid balance of the original loan.5New York State Senate. New York Tax Code 255 – Supplemental Mortgages Refinance a $300,000 balance into a $350,000 loan and tax is owed on $50,000, not $350,000. That turns a bill of roughly $3,675 into about $525.
To claim the credit, a sworn affidavit (the “Section 255 affidavit”) goes to the recording officer explaining how the old and new mortgages relate.5New York State Senate. New York Tax Code 255 – Supplemental Mortgages The original mortgage must have been properly taxed, and the supplemental instrument cannot secure any new debt beyond what the affidavit discloses.
CEMA (Consolidation, Extension, and Modification Agreement)
A CEMA uses the same principle but with a formal assignment: the existing lender assigns the old loan to the new lender so the previously taxed amount carries over. The borrower pays recording tax only on the difference between the old balance and the new loan. On a Suffolk County purchase, the seller’s existing mortgage can sometimes be assigned to the buyer’s new lender, and buyer and seller split the savings. CEMAs are available for first mortgages on one- to three-family homes and individual condo units. Co-ops do not qualify because they are not real property under New York law.
CEMAs do add time to the closing. Both lenders have to cooperate, and the existing lender sometimes charges an assignment fee. On a $500,000 purchase where the seller’s remaining balance is $350,000, the buyer saves roughly $3,675 by using a CEMA instead of recording a fresh mortgage.
Exemptions Worth Checking
A few categories of mortgages are partially or fully exempt:
- Mortgages where the borrower or lender is New York State, the United States, or their agencies and instrumentalities are generally exempt to the extent they are constitutionally immune from taxation.6Legal Information Institute. 20 NYCRR 644.1 – Exemptions
- Mortgages executed by qualifying voluntary nonprofit hospital corporations are exempt by statute.6Legal Information Institute. 20 NYCRR 644.1 – Exemptions
- Entities organized other than for profit are exempt from the 0.25% special additional tax but may still owe the basic and additional taxes.2New York State Senate. New York Tax Code 253 – Recording Tax
- A supplemental mortgage recorded solely to correct errors or add property to an existing lien, without new debt, owes no additional tax.5New York State Senate. New York Tax Code 255 – Supplemental Mortgages
Any exemption has to be backed by a sworn statement filed with the recording officer when the mortgage is submitted.5New York State Senate. New York Tax Code 255 – Supplemental Mortgages
Filing at the Suffolk County Clerk
Mortgage documents and the tax payment go to the Suffolk County Clerk in Riverhead. You can file in person, by certified mail, or electronically through Simplifile, CSC, or eRecording Partners Network, which Suffolk accepts for most document types.7Suffolk County Clerk. Mortgage Fee Schedule – County Clerk
Payment is typically a certified check or attorney escrow check made out to the Suffolk County Clerk. Personal checks are generally not accepted at these amounts. On top of the tax itself, the Clerk charges separate recording fees, including a per-page charge, a handling fee, a Commissioner of Education fee, and a Cultural Education Fund fee.7Suffolk County Clerk. Mortgage Fee Schedule – County Clerk They are small next to the tax but should be confirmed before filing.
Forms You Will Need
Form TP-584 is the combined return used in most real estate closings, covering transfer tax, the credit line mortgage certificate, and personal income tax certification.8New York State Department of Taxation and Finance. Real Estate Transfer and Mortgage Recording Tax Forms Form MT-15, the Mortgage Recording Tax Return, is required when the mortgaged property spans more than one locality with different tax rates;9New York State Department of Taxation and Finance. New York State Department of Taxation and Finance – Mortgage Recording Tax Return a Suffolk recording wholly inside the county does not always need it. Any Section 255 credit or exemption claim must be accompanied by a sworn affidavit explaining the basis.
The filing must identify the exact principal amount, the full legal names of borrower and lender, and the legal property description from the deed or title report. Mistakes in those fields can delay recording or surface as title problems later.
If the Tax Is Not Paid
Under Section 258 of the Tax Law, the Clerk will not record a mortgage until the tax is paid, and an untaxed mortgage cannot be released, discharged, assigned, or extended on the record. No court will enter a foreclosure judgment or enforce a debt secured by a mortgage with unpaid recording tax.10New York State Senate. New York Tax Code 258 A lender holding an untaxed mortgage has, in effect, an unenforceable lien until the tax is cleared.
Late or underpaid tax carries a 0.5% monthly penalty on the unpaid amount, capped at 25%, plus daily compounding interest at a rate the state adjusts quarterly. An underreporting of more than 10% or $2,000, whichever is greater, triggers an additional 10% penalty on the difference.11New York State Department of Taxation and Finance. Interest and Penalties
Is It Deductible on Your Federal Return?
No. The IRS treats mortgage recording tax as a settlement cost that gets added to your cost basis in the property rather than deducted in the year you close.12Internal Revenue Service. Publication 551 – Basis of Assets The higher basis reduces your taxable gain when you eventually sell, but there is no current-year write-off.
For a rental or investment property, the same rule applies: the recording tax goes into basis, not Schedule E. Property taxes on the rental are deductible as a business expense; the mortgage recording tax is not. A preparer who writes it off as a current expense is setting up a problem if the return is later reviewed.