New York Governor Paterson's Proposed Draft Budget Bill, in an "attempt to provide the City of New York and county governments with potential additional revenue," proposes to expand the Scope of the Mortgage Recording Tax to apply to Cooperatives.  The Governor is proposing a bill which would "expand the scope of the Mortgage Recording Tax, which is currently imposed on the recording of mortgages on real property with the county clerk, to include the filing of a financing statement securing a loan for the purchase of an ownership interest in a cooperative housing unit." The bill would "subject the filing of a financing statement with the county clerk to a tax that is calculated, administered, collected and distributed according to the laws pertaining to the tax on mortgages under Article 11 of the Tax Law."

Under the bill, the act would "take effect on the first day of the third month after it becomes law" and would apply to "financing statements filed on or after such date."

This is a proposed bill which clearly raises a whole host of questions and issues.  When additional information becomes available, we will forward such information to you.

If you have any questions or would like further information regarding this newsflash, please contact Michael Alfieri, Esq. at (212) 651-1200 or malfieri@prestitle.com.