When you record a mortgage in New York City you pay a tax on the loan amount — not the purchase price. On a commercial deal it's frequently the single largest closing cost, and it catches first-time borrowers off guard because it scales with the size of the loan.
How much it is
For commercial and most non-1–3-family property, the combined New York mortgage recording tax is about 2.80% of the mortgage amount on loans of $500,000 or more (roughly 2.05% below that). That single rate bundles a state, city, and MTA component.
Your lender pays a 0.25% slice of it, so as the borrower you typically bear around 2.55% of the loan. On a $2,000,000 mortgage that's roughly $51,000 — real money to plan for.
It's on the loan, not the price
A larger down payment means a smaller loan, which means a smaller tax — one more reason the loan amount, not just the rate, drives your true cost. Estimate yours with the NYC closing-costs calculator before you sign a term sheet.
The CEMA: don't pay it twice on a refinance
On a refinance, a Consolidation, Extension, and Modification Agreement (CEMA) lets your old and new lender assign the existing mortgage instead of paying it off — so you owe recording tax only on new money you borrow, not on the balance that was already taxed. On a large refinance the savings can be substantial.
A CEMA needs the outgoing lender to cooperate and adds legal and processing fees, so it isn't free or automatic — but on a sizable balance it's often well worth asking for.
Plan for it early
Because it's paid at closing and scales with the loan, fold the recording tax into your cost basis and your cash-to-close from day one. If you might refinance later, ask lenders whether their loan is CEMA-friendly.