Purchase CEMA
Purchase CEMA: cut the NYC mortgage recording tax
In New York City, buyers pay mortgage recording tax of 1.8% to 1.925% of the loan amount on houses and condos. With a Purchase CEMA, the seller's remaining mortgage is assigned to your lender, and you only pay tax on the new money.
Key facts
- Available in
- New York
- Borrower tax rate
- 1.8% under $500K, 1.925% at $500K and above (1-3 family and condos)
- Tax applies to
- Only the new money above the seller's assigned balance
- Not available for
- Co-ops (no mortgage recording tax applies)
- Extra cost
- Additional attorney and lender assignment fees; plan extra time
Who it's for
- Buyers of 1-3 family homes and condos in NYC
- Sellers with a meaningful unpaid mortgage balance
- Listing agents who want a pricing edge without a price cut
- Buyers financing $500,000 or more
Here is the math on a simple example. A buyer borrows $800,000. Without a CEMA, the tax at 1.925% is $15,400. If the seller still owes $500,000 and that balance is assigned, tax applies only to the $300,000 of new money, about $5,775. The buyer saves roughly $9,600 before the added CEMA fees.
A CEMA needs three parties to cooperate: the buyer's lender, the seller, and the seller's current lender, which must agree to assign the note. Many sellers share in the savings through the negotiated price, which is why we pitch CEMA to listing agents before a property even goes into contract.
Eric Kushnir leads our Purchase CEMA outreach and works with CEMA-experienced attorneys on both sides of the deal.
Popular in Brooklyn
Sheepshead Bay, Manhattan Beach, Gravesend, Midwood, Marine Park, Mill Basin & Bergen Beach, Canarsie, Dyker Heights
Questions
Does the seller have to agree?
Yes. The seller must request that their lender assign the mortgage, and the seller's lender has to cooperate. Most large servicers will, but it adds a few weeks.
Can I do a CEMA on a co-op?
No. Co-op share loans are not recorded mortgages, so there is no mortgage recording tax to save.
What does a CEMA cost?
Expect additional attorney fees on both sides plus assignment fees from the seller's lender. On most loans over $500,000 the tax savings are several times the added cost.
Is a CEMA available on new construction?
Sometimes. If the sponsor's construction loan can be assigned, a new development CEMA may be possible. Ask us before you sign the contract.
Questions about Purchase CEMA?
A licensed loan officer will walk you through the numbers, usually the same day.