A commercial property investor in New York is obtaining a $2 million construction loan that will later be converted to a permanent mortgage. How many times will mortgage recording tax be paid during this process?
Correct Answer
D) Twice, once for each mortgage recording
Under New York law, mortgage recording tax is due each time a mortgage is recorded. The construction loan requires recording and payment of mortgage recording tax. When converted to a permanent mortgage, this constitutes a new recording event requiring another payment of mortgage recording tax on the permanent mortgage amount.
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