Secret Plan Feared to Tax Mortgages on Co-op Homes

The New York Sun reports:

The new state law requiring public disclosure of the sale prices of coop apartments, signed by Governor Pataki last week, may be part of a secret plan to raise taxes a billion dollars a year by extending the mortgage recording tax to co-ops.

For individuals, the tax is between 2% and 2.125% of the amount of a mortgage. Until now, it has applied only to condominiums and houses, but not to co-ops.

When the bill was first announced, some real estate experts worried that the disclosure of prices would mean a loss of privacy, particularly for the celebrity buyers of eight-digit co-op apartments. But now, some suspect that the provision could be a "Trojan horse" that will allow the city to go after more tax revenue in the future by extending the lucrative mortgage recording tax to co-op loans.

A real estate lawyer for Ganfer & Shore LLP, Steven Ganfer, said the law is another step that shrinks the legal gap between co-ops and condos.

"The language of the bill indicates they want to make co-ops look more like real property and condos," Mr. Ganfer said.

You'll want to read this one is you live in New York.