Real Property Law 339 EE is a Tax Credit Only for Developers
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Many developers don’t know about a newly passed tax credit on mortgage interest, but they should. A tax that once went to the state now goes to developers. If you’re not taking advantage of this, you should.
Although the Mortgage Tax Credit Affidavit has existed for more than a decade, many developers aren’t familiar with it and haven’t taken advantage of it. Here’s what you need to know.
Put simply, if you’re developing condominiums, you pay mortgage tax on the underlying construction or blanket mortgage. When you sell the individual condo units, the buyers receive a credit for the mortgage tax you paid, and you can contractually obligate them to return that tax credit to you.
The credit is outlined in Real Property Law Section 339ee and (for New York City condominiums) in 20 NYCRR 651.1. You’ll have to meet certain conditions to claim the credit, but they aren’t overly restrictive, and the result will be extra money in your pocket.
If you have any questions about real estate tax credits or any part of the buying and selling process, or if you would like to discuss an upcoming or prospective transaction, please contact us.
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