We're the Port Authority, redeveloping the World Trade Center site after 9/11. Private lessees will borrow from outside lenders to fund redevelopment costs, and we'll be named mortgagee (alone or with the lenders) on their leasehold financing before assigning our interest to the actual lenders. Is that mortgage -- and its later assignments, splits, and modifications over the years -- exempt from mortgage recording tax?

Plain-English summary

The Port Authority of New York and New Jersey was created by an interstate Compact in 1921 (consented to by Congress) to coordinate transportation and commerce facilities in the Port District — an area of about 1,500 square miles centered on New York Harbor. The World Trade Center, authorized in 1962 alongside the Port Authority's acquisition of the Hudson Tubes (PATH rail system), was destroyed on September 11, 2001. Since then, the Port Authority has led redevelopment plans including the Freedom Tower, additional office towers, a memorial and museum, cultural facilities, a transportation hub, retail, and hotel/conference facilities.

To fund the substantial redevelopment costs, private lessees of WTC components will borrow from outside lenders, secured by mortgages against their leasehold interests — the Port Authority's own fee interest in the site will not be pledged. Under the financing structure, the Port Authority will be named mortgagee (alone or with the lenders) and will record the mortgage, even though all economic rights will belong to the lenders; the Port Authority will then assign its recorded interest to them. The same pattern repeats for additional mortgages covering further development costs. Over the following years, these mortgages may be severed, split into substitute mortgages, supplemented, modified, converted from construction to permanent financing, refinanced, or reassigned between lenders, with the mortgagor's identity potentially changing too.

Article 11 of the Tax Law (§ 253) taxes mortgage recording, and § 252 doesn't provide the Port Authority a specific statutory exemption — but it's well established that state agencies enjoy common-law tax immunity independent of any statute for property used in the public interest (citing a 1913 Attorney General opinion and Matter of Hamilton). The Compact's Unconsolidated Laws describe the Port Authority as "a body politic and corporate, as an instrumentality or agency of the two states" (§ 6451), making it a state instrumentality within the meaning of prior opinions like KIAC Partners (TSB-A-96(3)R). Following the same reasoning applied to other instrumentalities (Battery Park City Authority, TSB-A-02(2)R; Empire State Development Corp., TSB-A-00(3)R and TSB-A-02(6)R; Hotel Waldorf-Astoria Corp. v. State Tax Commission), the Department concluded that recording of ANY mortgage that is part of the WTC redevelopment — whether the Port Authority is sole mortgagee or co-mortgagee, and regardless of whether other co-mortgagees are private lenders — is exempt from mortgage recording tax, provided the Port Authority is the party that presents the mortgage for recording.

On the second issue (later changes to the mortgage), Tax Law § 255 generally exempts supplemental instruments and additional mortgages that don't increase the secured debt, and the Department confirmed this extends to later assignments, consolidations, severances, splits, restatements, modifications, spreader agreements, and extensions — AS LONG AS the principal amount secured is not increased and the Port Authority remains a party to the recorded instrument. If the debt is increased, tax is due only on the increase; and if a later instrument is recorded WITHOUT the Port Authority as a party, or triggers the NYC-specific spreading-agreement carve-out under § 255(1)(a)(ii) (which limits the general supplemental-mortgage exemption for real property newly brought under the lien in a city of a million-plus population), mortgage recording tax would be due on that instrument unless independently exempt.

What this means for you

Governmental authorities structuring pass-through mortgagee financing for major redevelopment projects

Being named mortgagee (even as a pass-through, later assigning to the real lender) can preserve MRT exemption across the LIFE of a long-term, multi-phase financing — including years of subsequent splits, modifications, and refinancings — as long as the authority remains a party to each recorded instrument and the secured debt doesn't increase.

Private lessees and lenders financing leasehold interests in authority-owned property

Confirm the authority is named as mortgagee (not just as landlord) on your financing instrument to access this exemption; if a later instrument is recorded without the authority as a party, expect MRT to apply.

Common questions

Q: Does the exemption survive years of subsequent mortgage splits, modifications, and refinancings?
A: Yes — as long as the Port Authority remains a party to each recorded instrument and the secured principal isn't increased, the exemption travels forward through assignments, severances, splits, restatements, modifications, and extensions.

Q: What if the secured debt increases at some point?
A: MRT becomes due, but only on the amount of the increase, not the entire mortgage.

Q: Does the special NYC "spreading agreement" rule matter here?
A: Yes — § 255(1)(a)(ii) can still tax a spreading agreement or additional mortgage that brings NEW property (not owned by the existing mortgagor) under the lien within a city of 1M+ population, even where the general supplemental-mortgage exemption would otherwise apply.

Q: Can another authority or developer rely on this specific opinion?
A: No. It binds the Department only as to this petitioner and these facts, though it applies well-established precedent for other NY governmental instrumentalities.

Citations and references

Statutes and regulations:

• Tax Law § 253 (mortgage recording tax on real property mortgages)
• Tax Law § 250(2)(a) (mortgage definition; increases in secured indebtedness taxable as to the increase)
• Tax Law § 252 (no statutory exemption specific to the Port Authority; common-law immunity applies independently)
• Tax Law § 255(1)(a) (supplemental/additional mortgage exemption if debt not increased; NYC spreading-agreement carve-out)
• 20 NYCRR § 644.1(a)(1) (exemption for NY State agency/instrumentality/political subdivision mortgagor or mortgagee)
• Unconsolidated Laws §§ 6401, 6404, 6451 (Port Authority Compact; instrumentality/agency status)
• Unconsolidated Laws §§ 6603, 6610 (Port Development Acts authorizing WTC/Hudson Tubes project and bond-secured mortgages)

Case law and prior opinions cited:

• Matter of Hamilton, 148 N.Y. 310 (state/municipal property held for public purposes is not subject to taxation)
• Hotel Waldorf-Astoria Corp. v. State Tax Commission, 86 A.D.2d 330; City of New York v. Tully, 88 A.D.2d 701 (common-law state-agency immunity doctrine)
• Franklin Society for Home Building and Saving v. Bennett, 282 N.Y. 79; Matter of Silberblatt, Inc. v. Tax Comm., 5 N.Y.2d 635 (MRT taxes the recording privilege, not the instrument)
• KIAC Partners, TSB-A-96(3)R (May 9, 1996) (Port Authority as NY State instrumentality)
• Battery Park City Authority, TSB-A-02(2)R (June 5, 2002); Empire State Development Corp., TSB-A-00(3)R (May 31, 2000) and TSB-A-02(6)R (December 13, 2002) (governmental-instrumentality MRT exemption for pass-through mortgagee financing)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/mortgage_rec_ao_2006.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/mortgage/a06_2r.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. M061010A

On October 10, 2006, the Department of Taxation and Finance received a Petition for
Advisory Opinion from The Port Authority of New York and New Jersey, 225 Park Avenue
South, New York, New York, 10003.
The issues raised by Petitioner, The Port Authority of New York and New Jersey, are:
1) Whether the taxes imposed by Article 11 of the Tax Law and Chapter 26 of the
New York City Administrative Code (collectively, the “mortgage recording tax”) are due
upon the recording of any mortgage of property (including, without limitation, leasehold
estates) that is part of the redevelopment of the World Trade Center when (a) Petitioner is
either the sole named mortgagee (whether as trustee, agent, nominee, or otherwise) or a
co-mortgagee (whether or not the other co-mortgagee or co-mortgagees are private
entities); (b) Petitioner records the mortgage; (c) the loan funds secured by the mortgage
are provided by one or more persons or entities other than Petitioner; and (d) the
mortgage is entered into in furtherance of the redevelopment of the World Trade Center
including, without limitation, use of the loan proceeds for development costs incurred by
parties other than Petitioner in furtherance of or in respect to the redevelopment of the
World Trade Center (hereinafter “Development Costs”) or to reimburse parties (including
Petitioner) for any such Development Costs.
2) Whether the mortgage recording tax is due upon the recording of the applicable
instrument or otherwise if the mortgage is supplemented1 or if the mortgage so
supplemented is thereafter from time to time supplemented again to the extent that the
then outstanding principal indebtedness (and/or an unfunded principal portion thereof to
the extent that the same constitutes or will constitute a bona fide debt) secured by or to be
secured by the mortgage (or any resulting substitute mortgage) is not increased, or, if
increased, mortgage recording tax is to be imposed only with respect to any increase in
the amount of secured indebtedness, and then only if the mortgage is not exempt because
of Issue 1, and the mortgage recording tax would otherwise have been required to be paid
on such additional indebtedness.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner is a municipal corporate instrumentality and political subdivision of the states
of New York and New Jersey, created by and existing by virtue of the Compact of April 30,
1

“Supplemented”, “supplementation” and “supplement” as used herein, shall include, without limitation, any
assignment, consolidation, substitution, severance, splitting, restatement, modification, amendment, spreader and/or
extension of a mortgage.

-2­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

1921, made by and between the states of New York and New Jersey and thereafter consented to
by the Congress of the United States (the “Compact”). As such, Petitioner is generally exempt
from state and local taxes of the states of New York and New Jersey. In the Compact, as
codified in the Unconsolidated Laws of New York, the two states recited their belief “that a
better co-ordination of the terminal, transportation and other facilities of commerce in… the port
of New York, will result in great economies, benefiting the nation, as well as the states of
New York and New Jersey;” and that the future development of such facilities would require the
cooperation of the States in the encouragement of the investment of capital and in the
formulation and execution of necessary plans (See Unconsolidated Laws §6401). The Compact
has been amended and supplemented from time to time by legislation adopted by the two States.
In general, the purpose of the states of New York and New Jersey in establishing
Petitioner was to provide transportation, terminal, and other facilities of commerce within the
Port District. For such purpose the States have from time to time authorized specific
transportation and terminal facilities and facilities of commerce and economic development and
have given Petitioner power to borrow money upon its bonds or other obligations; to establish
charges for the use of such facilities; and, in connection with specific facilities, to acquire real
estate by condemnation or the exercise of the right of eminent domain or otherwise. The Port
District comprises an area of about 1,500 square miles in both States centering about New York
Harbor.
Petitioner’s current facilities include, in addition to the World Trade Center, two tunnels
and four bridges between the states of New York and New Jersey, the PATH interstate rail
transit system (sometimes referred to as the “Hudson Tubes Facility”) including a terminal
station within the World Trade Center Site, a bus terminal, the Trans-Hudson ferry service, four
airports, a heliport, the Newark Legal and Communications Center, six marine terminals, two
waterfront development facilities, the Oak Point Rail Freight Link, a resource recovery facility
and certain regional development facilities in the Port District.
The World Trade Center, located on an approximately 16-acre site on the lower west side
of Manhattan, was authorized in 1962 by the same legislation that authorized Petitioner’s
acquisition of the Hudson Tubes. Petitioner was authorized to cooperate with other agencies of
government in the rehabilitation and redevelopment of the Hudson Tubes-World Trade Center
areas, in part for the purpose of the renewal and improvement of such areas, as part of this port
development project.
Pursuant to legislation enacted by the states of New York and New Jersey in 1962 (the
“Port Development Acts”), Petitioner was “authorized and empowered to establish, acquire,
construct, effectuate, develop, own, lease, maintain, operate, improve and rehabilitate a project
herein referred to as the port development project, which shall consist of a facility of commerce
herein referred to as the world trade center, to be located within the Hudson tubes-world trade
center area, and railroad facilities herein referred to as the Hudson tubes and the Hudson tubes
extensions.” (Unconsolidated Laws §6603.) Further, the Port Development Acts provided that

-3­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

the Port Authority was “authorized and empowered…to issue bonds for any of the purposes of
this act and to provide for payment thereof…and to secure all or any portion of such bonds by
mortgages upon any property held or to be held by the [Port Authority].” (Unconsolidated Laws
§6603.) The Port Development Acts also provided that the Port Authority “shall proceed as
rapidly as may be practicable to accomplish the purposes of this act.”
Additionally, the Port Development Acts establish that:
The effectuation of the world trade center, the Hudson tubes and the Hudson tubes
extensions, or any of such facilities constituting a portion of the port development
project, are and will be in all respects for the benefit of the people of the states of
New York and New Jersey, for the increase of their commerce and prosperity and
for the improvement of their health and living conditions; and the port authority
and any subsidiary corporation incorporated for any of the purposes of this act
shall be regarded as performing an essential governmental function in undertaking
the effectuation thereof, and in carrying out the provisions of law relating thereto.
(Unconsolidated Laws §6610.)
Construction of the World Trade Center commenced in 1966 and was completed in 1981.
The various components of the World Trade Center, including over 10 million square feet of
office space, a United States Customs House, a hotel, the PATH-World Trade Center station, and
various retail facilities were destroyed by the terrorist attacks of September 11, 2001.
Since September 11, 2001, Petitioner, together with the lessees of the office and retail
components of the World Trade Center site, and Federal, state, and local public officials,
community groups, architects and engineers, and other interested parties, has been engaged in
various activities pertaining to the rebuilding of the World Trade Center and the redevelopment
of the site. It is currently anticipated that the redeveloped World Trade Center site will include
the Freedom Tower and four additional office towers, as well as a memorial, memorial museum,
cultural facilities, the World Trade Center Transportation Hub (including the PATH World Trade
Center terminal), retail facilities, hotel and conference center facilities, streets and significant
public open spaces, and the utilities and infrastructure to support such redevelopment.
A significant portion of the Development Costs will be provided through the issuance of
debt by various public and private sector entities. Under contemplated financing arrangements,
the lessees of various components of the World Trade Center will borrow funds from sources not
related to or acting as nominees for the lessees, which funds will be used to pay for or reimburse
parties, including Petitioner, for Development Costs. The borrowings will be secured by one or
more mortgages against one or more of the leasehold interests held by the lessees, together with
such other pledges and guarantees as the lenders require of the lessees. Petitioner’s fee interest
in the World Trade Center site will not be encumbered by any of the mortgages.

-4­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

Under such financing arrangements, Petitioner will be named as the mortgagee, either
alone or with the lenders, and record one or more mortgages in the approximate amount of the
Development Costs. Although Petitioner will be named as a mortgagee or co-mortgagee, all
rights under the mortgages will inure to the benefit of the lenders, who will for all purposes be
beneficial owners of the mortgages. Upon recording the mortgages, Petitioner will assign to the
lenders all of Petitioner’s right, title, and interest in and to the mortgages, and the lenders will, at
the time of the assignment or thereafter, fund the mortgages which, at all times, will secure bona
fide debt. After assigning its interest to the lenders, Petitioner will continue to own the World
Trade Center site, and the other contractual arrangements with the lessees will be unaffected,
including Petitioner’s enforcement rights under the leases pertaining to the various components
of the World Trade Center site. However, it is also contemplated that if the lessees incur
additional Development Costs beyond those originally anticipated or make other additional
expenditures in performing any obligations of Petitioner with respect to the World Trade Center
site, Petitioner will, as mortgagee, enter into the record either alone or with the lenders, an
additional mortgage or mortgages against one or more of the leasehold interests held by the
lessees and thereafter assign such mortgage or mortgages to the lenders who will, at the time of
the assignment or thereafter, fund such mortgages which, at all times, will secure bona fide debt.
After Petitioner initially records any of the mortgages and assigns its interest therein to
one or more lenders, the mortgage or mortgages may from time to time (and over a period of
several years) be severed and split. The resulting substitute mortgages may be further
supplemented and, in this event, appropriate instruments reflecting the supplementation will be
recorded in the appropriate amounts, but in no event aggregating more than the then outstanding
principal amount including any unfunded advances which constitute bona fide debt to the
respective lenders financing all or any portion of the Development Costs, and the lien of the
mortgages from the leaseholds not the subject of the respective resulting substitute mortgages
shall be released. The lenders (or their successors) will fund the loans to the extent of the
amount secured by the substitute mortgage. The funding under the substitute mortgages may be
in the form of advances as construction progresses on a particular leasehold or as Development
Costs are incurred or in the form of a full advance of the loan proceeds upon or after an
assignment of a substitute mortgage. In accordance with customary mortgage financing
practices, mortgages securing construction financing may be assigned, supplemented, modified
and converted to permanent financing upon completion of construction or the expiration of the
term of the initial loans. Permanent loans may be refinanced or assigned by one lender to
another. The identity of the mortgagor may also change by reason of the assignment of the
lessee/mortgagor’s interest to an affiliate or to an unrelated person.
Applicable law and regulations and cases
Section 253 of Article 11 of the Tax Law imposes taxes on the recording of mortgages of
real property measured by the principal debt or obligation secured by such mortgages.
Section 250(2)(a) of the Tax Law provides, in part:

-5­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

The term “mortgage” as used in this article includes every mortgage or deed of
trust which imposes a lien on or affects the title to real property, notwithstanding that
such property may form a part of the security for the debt or debts secured thereby. …A
contract or agreement by which the indebtedness secured by any mortgage is increased or
added to, shall be deemed a mortgage of real property for the purpose of this article, and
shall be taxable as such upon the amount of such increase or addition….
Section 252 of the Tax Law, applicable to exemptions from the mortgage recording tax,
provides, with certain exceptions not relevant herein, that “No mortgage of real property situated
within this state shall be exempt, and no person or corporation owning any debt or obligation
secured by mortgage of real property situated within this state shall be exempt, from the taxes
imposed by this article by reason of anything contained in any other statute.”
Even though section 252 of the Tax Law does not provide a specific exemption for the
activities of Petitioner, it is well established that State agencies enjoy an immunity from taxation
independent of the statutory exemptions listed in section 252 of the Tax Law for property
utilized in the public interest.
Section 255(1)(a) of the Tax Law provides, in part:
(i) If subsequent to the recording of a mortgage on which all taxes, if any, accrued
under this article have been paid, a supplemental instrument or mortgage is recorded for
the purpose of correcting or perfecting any recorded mortgage, or pursuant to some
provision or covenant therein, or an additional mortgage is recorded imposing the lien
thereof upon property not originally covered by or not described in such recorded
primary mortgage for the purpose of securing the principal indebtedness which is or
under any contingency may be secured by such recorded primary mortgage, such
additional instrument or mortgage shall not be subject to taxation under this
article…unless it creates or secures a new or further indebtedness or obligation other than
the principal indebtedness or obligation secured by or which under any contingency may
be secured by the recorded primary mortgage….
(ii) Notwithstanding any provision to the contrary in subparagraph (i) of this
paragraph, the taxes imposed by or pursuant to the authority of this article shall apply to
the recording of a spreading agreement or additional mortgage which imposes the lien
thereof upon real property located in any city in the state having a population of one
million or more and not originally covered by or described in a recorded primary
mortgage, unless the real property that becomes subject to the lien of such spreading
agreement or additional mortgage is owned by the mortgagor of the real property subject
to the lien of such recorded primary mortgage….

-6­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

Section 644.1(a)(1) of the Mortgage Recording Taxes Regulations exempts the recording
of mortgages where the mortgagor or mortgagee is New York State or any of its agencies,
instrumentalities, or political subdivisions to the extent immune from mortgage recording tax.
In a March 29, 1913, opinion, the Attorney General opined that no mortgage recording
tax was due when New York State acted as mortgagor and quoted the following passage from
Matter of Hamilton, 148 NY 310, 313-314:
The property held by the state, or by any of its municipal divisions, for public
purposes, is not, and never has been, subject to taxation…The end and object of all
taxation is to raise revenue for the purpose of defraying the expenses of government, and
since no revenue could be raised by imposing taxes on property owned by the state itself,
or by any of its political subdivisions, such property is in no just or practical sense the
subject of taxation….
This principle has been applied to exempt from the mortgage recording tax the recording
of mortgages on property when legal title is held by a New York State industrial development
agency even though beneficial ownership of such property is held by a private interest in 1982
Opns St Comp No. 82-188, p 240; One Park Place Associates, Adv Op St Tx Comm, May 24,
1982, TSB-A-82(1)M.
In Hotel Waldorf-Astoria Corp. v State Tax Commission, 86AD2d 330, 334, in
acknowledging that a $45 million mortgage secured by the Waldorf-Astoria hotel was exempt
from the mortgage recording tax because the mortgagee (the New York State Employees’
Retirement System) was a New York State agency, the court stated that “as a State agency, the
Retirement System enjoys an immunity from taxation independent of the statutory exemptions
listed in Section 252 of the Tax Law…” The court reasoned that imposition of a tax upon a
mortgage held by a New York State agency was tantamount to tax upon the agency itself. The
court, thus, concluded that the tax, on the recording of the mortgage securing the loan, in this
case amounted to an unlawful assessment of the agency’s property in violation of its general
immunity from taxation. (See also Matter of City of New York v Tully, 88AD2d 701.)
Section 253 of the Tax Law imposes the mortgage recording tax on the exercise of the
privilege of recording a mortgage, not on the mortgage itself as property. (See Franklin Society
for Home Building and Saving v Bennett, 282 NY 79; Matter of Silberblatt, Inc. v Tax Comm, 5
NY2d635; One Park Place Associates, Adv Op St Tx Comm, May 24, 1982, TSB-A-82(1)(M);
and New York State Urban Development Corp., Adv Op Comm T&F, March 10, 1993,
TSB-A-93(4)-R.) An informal opinion of the Attorney General, dated March 7, 1956, stated
that:
[i]t should be noted that section 257 of Article 11 of the New York State Tax Law
is silent as to which party to the mortgage shall pay the tax. Under its terms the taxes

-7­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

shall be payable on the recording of each loan subject to tax so that the party who records
is the one upon whom the tax is imposed….(1956 Atty Gen [Inf Opns] 27, at 28.)
Opinion
Issue #1
Under the Compact, Petitioner was created as a “body corporate and politic.” See
Unconsolidated Laws §6404. Section 6451 of the Unconsolidated Laws describes Petitioner as
“a body politic and corporate, as an instrumentality or agency of the two states to effectuate such
pledge of cooperation.” Accordingly, Petitioner is an instrumentality of the State of New York.
See KIAC Partners, Adv Op St Tx Comm, May 9, 1996, TSB-A-96(3)R. As such, the recording
of any mortgage that is part of the redevelopment of the World Trade Center as described in this
Opinion in which Petitioner is named as a sole mortgagee (whether as trustee, agent, nominee
or otherwise) or a co-mortgagee (whether or not a private entity is the co-mortgagee), is
exempt from the mortgage recording tax, provided that Petitioner is the party that presents the
mortgage for recording. See Hotel Waldorf-Astoria Corp., supra; New York State Urban
Development Corporation d/b/a Empire State Development Corp., Adv Op Comm T&F,
May 31, 2000, TSB-A-00(3)R Battery Park City Authority d/b/a Hugh L. Carey Battery Park
City Authority, Adv Op Comm T&F, June 5,2002, TSB-A-02(2)R; New York State Urban
Development Corporation d/b/a Empire State Development Corp., Adv Op Comm T&F,
December 13, 2002, TSB-A-02(6)R; and section 644.1(a)(1) of the Mortgage Recording Taxes
Regulations.
Issue #2
In accordance with the above cited section 255 of the Tax Law, once a mortgage has been
given and recorded, the recorded primary mortgage may be changed by a supplemental
mortgage, and, under the provisions noted above, no additional recording tax will be due as long
as the amount secured remains the same. If, however, the indebtedness secured by the mortgage
is reduced or the mortgage lien is terminated for any reason, mortgage recording tax would be
due upon the recording of an instrument evidencing any increase in the indebtedness secured by
the mortgage.
Accordingly, to the extent the principal amount of secured indebtedness is not increased,
the recording of any assignment, consolidation, substitution, severance, splitting, restatement,
modification, amendment, spreader, and/or extension of the mortgage is exempt from mortgage
recording tax, either because such action will not create a new mortgage subject to tax under
section 253 of the Tax Law or because the instrument constitutes a supplemental mortgage under
section 255 of the Tax Law provided that the instrument so recorded is not subject to tax under
section 255(1)(a)(ii) of the Tax Law. In the present case, if an instrument is recorded which
evidences an increase in the principal amount secured by the mortgage, and Petitioner is not a
party to the recorded instrument, the mortgage recording tax would be due with respect to the

-8­
TSB-A-06(2)R
Mortgage Recording Tax
October 31, 2006

amount of the increase; or if an instrument is recorded which is subject to mortgage recording tax
pursuant to section 255(1)(a)(ii) of the Tax Law, and Petitioner is not a party to the recorded
instrument, the tax would be due with respect to the principal amount secured by the mortgage,
unless the recording of the instrument is otherwise exempt. See New York State Urban
Development Corporation, supra and Battery Park City Authority, supra.

DATED: October 31, 2006

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.