New York Mortgage Recording Tax: What Staten Island Buyers Need to Know

If you're buying a home in Staten Island with a mortgage, one of your largest closing costs will be New York's mortgage recording tax. This tax can easily add thousands of dollars to what you owe at closing — but understanding how it works (and knowing about legal strategies like a CEMA) can help you plan accordingly and potentially save money.

What Is the Mortgage Recording Tax?

The mortgage recording tax is a one-time tax charged by New York State and New York City when a mortgage is recorded with the county. It applies to every new mortgage being placed on property in New York City, including Staten Island.

Important: This is not a federal tax, not a property tax, and not something your lender charges you. It's a New York-specific tax that must be paid before your mortgage can be officially recorded.

Current Mortgage Recording Tax Rates in Staten Island

Staten Island (Richmond County) is part of New York City, which means buyers pay both state and city mortgage recording tax. Here's how the rates break down:

For Mortgages Under $500,000

• Total combined rate: 1.80% of the loan amount (the borrower pays 1.55%; the lender pays 0.25%)
• This includes both New York State and New York City mortgage recording taxes

For Mortgages of $500,000 or More

• Total combined rate: 1.925% of the loan amount (the borrower pays 1.675%; the lender pays 0.25%)
• This includes both New York State and New York City mortgage recording taxes

Residential vs. Commercial Rates

The rates above apply to one-, two-, or three-family residential properties. Commercial mortgages have different rates and structures.

How Much Will You Actually Pay?

Let's look at real-world examples:

As you can see, this is not a small fee. On a $600,000 mortgage, you're looking at nearly $17,000 in mortgage recording tax alone — separate from your down payment, attorney fees, title insurance, and other closing costs.

Who Pays the Mortgage Recording Tax?

In New York, the buyer (borrower) pays the mortgage recording tax. It is typically collected at closing and paid by your attorney to the county clerk when the mortgage is recorded.

There is no legal way to avoid this tax if you are taking out a new mortgage — but there are legal strategies to reduce it (more on that below).

When Is the Tax Paid?

The mortgage recording tax is paid at closing before your mortgage can be recorded. Your buyer's attorney will calculate the exact amount based on your loan amount and include it on your closing disclosure.

Recording typically happens within 24–48 hours after closing, once all funds have cleared.

Do You Have to Pay It If You're Paying Cash?

No. If you're a cash buyer (buying without a mortgage), you do not pay mortgage recording tax. This is one reason some buyers prefer to pay cash or use alternative financing structures when possible.

What Is a CEMA and How Can It Save You Money?

A CEMA (Consolidation, Extension, and Modification Agreement) is a legal mechanism that allows you to "consolidate" the seller's existing mortgage with your new mortgage. Learn more about what a CEMA is and how it can save on taxes.

How a CEMA Works

Instead of paying off the seller's old mortgage and recording a brand-new mortgage (which triggers full mortgage recording tax), a CEMA allows you to:

Keep the seller's existing mortgage "alive" legally

Extend and modify it to reflect your new loan terms

Pay mortgage recording tax only on the difference between the old mortgage balance and your new loan amount

CEMA Savings Example

Let's say:

• You're taking out a $600,000 mortgage
• The seller's existing mortgage balance is $400,000

Without a CEMA:

• You pay mortgage recording tax on the full $600,000 = $16,800

With a CEMA:

• You only pay tax on the difference ($600,000 - $400,000 = $200,000)
• Mortgage recording tax = $5,600
• Savings: $11,200

When Is a CEMA Worth It?

A CEMA can save you thousands, but it's not always feasible:

• The seller must have an existing mortgage (it doesn't work if the seller owns the property free and clear)
• Both the seller's lender and your lender must agree to participate
• There are additional attorney fees and processing time involved
• The closing process can take longer

Your attorney can help you determine whether a CEMA makes financial sense in your specific transaction.

Are There Any Exemptions or Reductions?

New York does provide limited exemptions, but they are narrow:

• Refinances with the same lender: If you refinance with the same lender and the new loan amount is less than or equal to the original principal, you may qualify for reduced tax
• Government programs: Certain affordable housing programs may have reduced rates
• Commercial transactions: Different rules apply

For most residential buyers taking out a traditional mortgage, there are no exemptions.

Other Closing Costs to Plan For

The mortgage recording tax is just one component of your total closing costs. Other major expenses include:

• Attorney fees (typically $2,000–$4,000)
• Title insurance (varies based on purchase price)
• Bank attorney fees (often $500–$1,500)
• Mansion tax (if your purchase price is $1 million or more)
• Transfer taxes
• Survey, home inspection, appraisal fees

How Your Attorney Helps With Mortgage Recording Tax

An experienced real estate attorney will:

• Calculate the exact mortgage recording tax based on your loan amount
• Advise you if a CEMA is feasible and financially beneficial
• Coordinate with your lender and the seller's attorney to structure the CEMA
• Ensure the tax is paid correctly and your mortgage is recorded promptly
• Review your closing disclosure to confirm all numbers are accurate

Learn more about what your attorney does at closing.

Planning Ahead for Mortgage Recording Tax

Because this tax can add $10,000, $15,000, or more to your closing costs, it's critical to factor it into your budget early.

Tips for Planning:

Ask your lender for a loan estimate that includes mortgage recording tax

Talk to your attorney about whether a CEMA is an option

Compare the cost of a CEMA (including extra attorney fees) to the tax savings

Budget for the full amount so you're not surprised at closing

If you're considering paying cash to avoid this tax, weigh the opportunity cost of tying up that much capital versus the tax savings.

Mortgage Recording Tax vs. Other Taxes

It's easy to confuse the mortgage recording tax with other real estate taxes in New York:

The mortgage recording tax is separate from all of these.

What Happens If the Tax Isn't Paid?

If the mortgage recording tax is not paid, your mortgage cannot be recorded. This means:

• Your lender will not release the loan funds
• The seller will not receive payment
• The closing cannot be completed

This is why it's critical to have an experienced attorney handling your closing — they ensure all taxes and fees are calculated correctly and paid on time.

Final Thoughts: Factor This Into Your Budget

New York's mortgage recording tax is one of the largest, most overlooked costs for home buyers in Staten Island. Whether you're buying your first home or refinancing, understanding this tax and exploring strategies like a CEMA can save you thousands.

The key takeaways:

• Budget for approximately 2.4% to 2.8% of your mortgage amount in recording tax
• A CEMA can significantly reduce your tax burden if the seller has an existing mortgage
• An experienced attorney is essential for navigating this process and ensuring compliance

Ready to Close With Confidence?

With over 25 years representing Staten Island home buyers, I help clients understand every line item at closing — including mortgage recording tax and CEMA opportunities. Free initial consultation — flat-fee representation from contract through closing.

Call (718) 442-2010, text (718) 957-8121, or schedule online.

Pete Weinman is a real estate attorney licensed in New York and New Jersey, with offices at 260 Christopher Lane, Suite 201, Staten Island, New York 10314. This article is for general informational purposes only and does not constitute legal advice. Please consult an attorney regarding your specific situation.