On September 13th, Governor Cuomo Signed a bill that immediately became law.

The title insurance industry, along with County Clerks and attorneys, have  been wrestling with how to comply with this law.

I have attached two documents - letters to the Commissioner of Taxation & Finance - recounting our efforts to forestall implementation of this law pending adjustments for workability and some of the issues that have arisen since the law took effect.

As stakeholders, the Land Title Association continues to seek guidance and provide subject matter expertise.

Read the letters.

EXECUTIVE COMMITTEE MEETING
New York State Land Title Association
First Nationwide Title Agency
50 Charles Lindburgh Boulevard
Uniondale, NY
June 11, 2019
10:30 AM


AGENDA
1.    Call to order – President Stancanelli
2.    President’s Greeting – President Stancanelli
3.    Approval of May Minutes - Executive Director Treuber
4.    Exec Director Report – Executive Director Treuber
5.    Treasurer Report – Mr. Frates
6.    Title Section Report – Chair Keyse
7.    Agent Section Report – Chair Giliotti
8.    Charitable Works Committee Report – Chair Roper
9.    Law Committee – Chair Danzi
10.    New Business
11.    Adjourn

The twelve voting members of the Agents and Abstracters Section will be:
Stancanelli

Giliotti    

Farrell    

Tafuri

Partridge

Guerriere

Litwack

Swarthout
Collins

Giliotti

Zankel

Spano

The next Executive Committee Meeting will be held at the Annual Meeting on September 17, 2019 at Gurney’s Resort, Montauk, NY.

NYSLTA had a telephone call with the Taxation & Finance Department on Tuesday April 30^th at 3:00. 

The following questions were asked by NYSLTA.

The Taxation and Finance Department’s answer follows each of the questions.

1.      If contracts made before April 1, 2019 are exempt from the new tax, what kind of proof will be required to show that the contract was actually made before April 1, 2019?  Besides the recording of the contract and/or payment of a deposit, what are the “other facts and circumstances” that the commissioner will require?

Will proof of a wire transfer be acceptable?

Does the down payment check or wire transfer need to be dated on or before April 1, 2019 for the conveyance to be exempt from the new tax?

If the contract is fully executed on or before April 1, 2019, but the contract permits the down payment to be made after April 1, 2019 (after the contract is fully executed), is the conveyance exempt from the new tax?

This question was primarily answered by Deb Lieberman. The phrase “other facts and circumstances” in the new statute came from prior transfer tax statutes. They will go back and look at earlier transfer tax cases and guidance and provide public guidance on the issue of when a contract is grandfathered. She opined that evidence of a wire transfer of a deposit will probably be acceptable evidence of the contract date.

A common theme through all of their answers was that public guidance will be provided soon, so stay tuned.

2.      If the closing occurs on or before July 1, 2019, does the deed have to be recorded on or before July 1, 2019 for the conveyance to be exempt from the new tax?  If the deed does not have to be recorded by July 1, 2019 will the date of the deed prior thereto be sufficient proof of a “conveyance” on or before July 1, 2019.

The date of conveyance is the date of “closing”, not the date of recording for purposes of paying the increased tax. If your deal closes before July 1 you do not have to try to rush to get it recorded before July 1 in order to beat the increase in the transfer tax.

3.       If a buyer purchases two condominium units, one for $1.5M and the other for $1M, is the State TT .4% for each or is it .65% because it is a “bulk” or “commercial” sale in the way that the City currently views it?  Will it make a difference if the two condominiums are purchased via one contract or via 2 separate contracts?

4.      Same concept if someone were to buy 2 units, each one for $2.5M, which aggregated is $5M.  However, the slight difference here is that the sale does not have to be considered “commercial” (although it may) because the dollar amounts in the aggregate exceed $3M, which is the threshold for the tax to increase to .65% for “residential” purchases. In other words, will aggregation be applied here? Again, will it make a difference if the two condominiums are purchased via one contract or via 2 separate contracts?

The Department did not answer questions 3 and 4 because they felt that further investigation is required on their part. They gave the impression that the same rules as currently apply for the City tax will probably be applied to bulk sales.

5.      When the rates go into effect, how will the TP-584 forms change to account for the different tax brackets?

There will be a new TP-584-NYC form. ACRIS is already on board with this. The form has a part III for the supplemental tax. This should be live at least 15 days in advance. That would be June 15.

6.      We would like the option to pay the Mansion Tax and Transfer Tax directly to the state on line prior to recording documents in the county.  This is would result in the state receiving payment prior to recording documents.

On-line payment of transfer tax is something that they would like to do, but it is not available yet. They are on board with the concept. “Maybe someday.”

7.      Once the new rates go into effect, will there be a contact person that we can speak with if we have additional questions?

They were reluctant to name a single contact person. Calls should go to the call center. If the call center cannot answer the question you should call any contact person that you are used to dealing with.

8.      Will regulations be issued for guidance to the industry?

There are no plans for a set of regulations. There will be public guidance published.

9.      What about mixed-use properties?  For instance, what if a property is sold that has commercial space on the ground floor and 2 residential apartments above?

Mixed use properties will be treated as residential for purposes of the additional transfer tax.

For the supplemental mansion tax the value of the property will be apportioned between the residential and commercial portions and the supplemental tax will only be applied to the residential portion. This is the way it is currently done.

In recent years New York's Legislature has taken several steps to change the way the popular STAR tax program is administered.  The State has continued to implement a series of modifications to how New Yorkers receive their rebates. New York has been moving away from providing STAR as an upfront savings on School Tax bills.

The modification began in 2016 when New Yorkers who bought their home after August 1, 2015 received their STAR checks in the mail rather than receive the reduction in their school tax bill.

Another round of modifications was recently made in the State Budget that was approved on Monday April 1, 2019.

The first change will start this fall and expands the mail check program to include not only new homeowners, but also to anyone earning between $250,000 and $500,000 a year.  These homeowners will receive a check for their STAR rebates rather than receive the savings directly in their school-tax bills.  As a result, only those homeowners who fall below the $250,000 threshold and who bought their existing home prior to mid-2015 will receive the STAR discount directly off of their School Tax bills. 

The second change allows homeowners who qualify for the STAR to have a choice as to whether to stay with the current system or shift to the State's program. However, those who stay with the current system will have the amount of their benefit frozen at 2019 levels - they will lose the 2% increase each year.   This will incentivize existing homeowners and new homeowners who fall below the $250,000 threshold to elect to receive a rebate check.   If the switch is not made to receiving a check, the homeowner will not receive the 2 percent increase in their tax savings this fall.   The rebate will essentially remain the same until the switch to checks is made.

The State's goal is to move everyone over to receiving checks as the Governor claims it is more efficient for the State. The changes won't impact who is eligible for the program - just whether they receive the rebates in a check or as a reduction in their school-tax bills.

The NY State Tax Department is expected to send letters to eligible property owners with instructions for switching.  Property owners can also find instructions online to end their current STAR exemption and register with the State. Homeowners need to notify their town assessor in writing. Then register with the state.  A homeowner can call the State tax department with questions at 518-457-2036.

STAR PROGRAM FACTS

• If you own your home, it is your primary residence, and your income is $500,000 or less, you are eligible for the Basic STAR credit.
• Senior citizens - those who have jointly owned property with one spouse or sibling who is age 65 by year's end - they are eligible to receive Enhanced STAR. The income eligibility is $86,300 or less.
• Enhanced STAR is a larger rebate: Seniors get an average $1,400 a year back on their school taxes.
• STAR is based on the first $30,000 of the full value of a home. For Enhanced STAR, it is based on the first $68,700.
• Last year, New York issued 343,000 STAR checks.
• The STAR program is a separate program from the Property Tax Relief Credit.  These checks are mailed to homeowners with an adjusted gross household income of $275,000 or less and whose school district remained under the property tax-cap.

EXECUTIVE COMMITTEE MEETING
New York State Land Title Association
First American Title Insurance Company
666 Third Avenue
New York NY 10017
April 9, 2019
10:30 AM

AGENDA
1.    Call to order – President Stancanelli
2.    President’s Greeting – President Stancanelli
3.    Approval of February Minutes - Executive Director Treuber
4.    Exec Director Report – Executive Director Treuber
5.    Treasurer Report – Mr. Frates
6.    Litigation/Legislation – President Stancanelli
7.    Report from ALTA – ALTA CEO Cornelia Horner
8.    Title Section Report – Chair Keyse
9.    Agent Section Report – Chair Giliotti
10.    Education Committee – Chair Labar
11.    Legislative Committee Report – Chair Keyse
12.    Municipal Liaison Committee Report – Chair Scaturro
13.    Remote Online Notary Committee Report – Chair Vincini
14.    New Business
15.    Adjourn