Legislation has been reintroduced in the New York State Assembly (A.3009-B Part VV) and the Senate (S.2509-B Part SS) that, if enacted, will require (i) the recording of certain mezzanine debt and preferred equity investments and (ii) the payment of mortgage recording tax (MRT) on such debt or investments. The stated purpose of the legislation is to provide revenue for public and affordable housing. While it is unclear whether the legislation will be enacted, New York lenders and borrowers should be aware of the potential adverse implications.
New York’s Proposed Tax on Mezzanine Debt, Preferred Equity May Have Adverse Implications for NY Lenders, Borrowers
