Assistance and Incentives

Mortgage Recording Tax Exemption

Mortgages filed in the Town of Bethlehem carry a 1% mortgage recording tax. The Town of Bethlehem IDA has the ability to provide an exemption from the mortgage recording tax for qualified projects.

Overview

State law provides that mortgages recorded by the IDA are exempt from mortgage recording taxes imposed pursuant to Article II of the Tax Law. The IDA has a general policy of abating mortgage-recording taxes for the initial financing obtained from the IDA with respect to each project that the IDA issues debt which will be secured by a mortgage upon real property. In instances where the initial financing commitment provides for a construction financing of the IDA to be replaced by a permanent financing of the IDA immediately upon the completion of the project, the IDA’s general policy is to abate the mortgage recording tax on both the construction financing and the permanent financing.

Refinancing

In the event that the IDA retains title to a project, it is the general policy of the IDA to abate mortgage recording taxes on any debt issued by the IDA for the purpose of refinancing prior debt issued by the IDA, and on any modifications, extensions and renewal, so long as the relative IDA fees have been paid.

Non-IDA Projects

In the event that the IDA does not hold title to a project, it is the policy of the IDA not to join in a mortgage relating to that project and not to abate any mortgage recording taxes relating to that project.

Non-IDA Financing

Occasionally, a situation will arise where the IDA holds title to a project, the project occupant needs to borrow money for its own purposes (working capital, for example), and the lender will not make the loan to the project occupant without obtaining a fee mortgage as security. In such instances, the policy of the IDA is to consent to the granting of such mortgage and to join in such mortgage, so long as the following conditions are met:

  • The documents relating to the proposed mortgage make it clear that the IDA is not liable on the debt, and that any liability of the IDA on the mortgage is limited to the IDA’s interest in the project;
  • The granting of the mortgage is permitted under any existing documents relating to the project, and any necessary consents have been obtained by the project occupant; and
  • The payment of the IDA fee relating to same.

To learn more about the Mortgage Recording Tax Exemption and if your business and project would qualify please contact:  Elizabeth Staubach, Economic Development Coordinator at 518-439-4955 ext. 1189 or estaubach@townofbethlehem.org.