MACo Supports Closing Tax Loophole for Indemnity Mortgages

MACo Associate Director Andrea Mansfield testified before the House Ways and Means Committee on February 23 in support of HB420.  The proposed legislation would apply the recordation tax to an indemnity mortgage in the same manner as if the guarantor were primarily liable for the guaranteed loan. The recordation tax would not apply if the recordation tax was paid on another instrument of writing that secures payment of the guaranteed loan, or if the indemnity mortgage is for less than $5 million.

HB420 closes a loophole in the current law and would ensure that all entities are paying the appropriate taxes on real estate transactions.   At a time when State aid to local governments has been reduced significantly and property assessment declines are affecting the county’s source of revenue, the property tax, counties need to have the ability to fairly and justifiably collect taxes that are rightly theirs.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.