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Last Updated: 4/6/2018

Debt Subject to Mortgage Registry Tax

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New Loan Agreements and New Mortgages

If a debt agreed to under a loan agreement is being secured by a mortgage, the Mortgage Registry Tax (MRT) is due on the debt amount being secured. View the law Minnesota Statutes 287.035.

Example

  • Paul signs a promissory note as evidence of a $100,000 debt to the bank.
  • Paul signs a mortgage in favor of the bank to secure "Note A" with Minnesota real property.
  • The bank submits the mortgage for recording.

The debt amount subject to MRT is $100,000.

  • Sometime later, when Paul’s current loan balance under “Note A” is $ 70,000, Paul signs a new loan agreement (“Note B”) for a loan that will be used to pay off “Note A” and which will give Paul a lower interest rate.
  • Paul signs “Mortgage B” in favor of the bank to secure Note B in the amount of $ 70,000.
  • The bank releases Mortgage A and submits Mortgage B for recording.

The debt subject to MRT is $70,000.

Change to Original Loan Agreement (Note) and Mortgage

If a debt agreed to under a loan agreement (note), which is secured by an existing mortgage, is changed and now includes additional debt which is going to be secured by a supplemental mortgage, MRT is due on the difference between the existing loan balance and the amount secured after recording the supplemental mortgage. View the law M.S. 287.05, subd. 2 .

  • Paul signs a promissory note (“Note A”) as evidence of a $ 100,000 debt to Bank A.
  • Paul signs a mortgage in favor of Bank A to secure “Note A” with MN real property.
  • Paul’s current loan balance under “Note A” is $ 40,000. Bank A agrees to lend Paul an additional $ 50,000.

Bank A modifies “Note A” to reflect the additional $ 50,000.

  • Bank A records a supplemental mortgage to secure the new debt added to “Note A.”
  • Amt. of debt under “Note A” secured by the supplemental mortgage is $ 90,000
  • Amt. of debt under “Note A” secured by the same mortgage prior to its being supplemented is $ 40,000

Debt subject to MRT is $ 50,000