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Last Updated: 3/4/2019

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 1: Standard Home Mortgage-New Debt

Mortgage 1 is recorded to secure a debt amount described in Note 1-$500,000 

​Does the document secure a new debt or increase an existing debt? ​Yes
​What is the document doing? ​Securing $500,000 of "new" debt
​Debt subject to tax? ​$500,000

 

Example 2: Standard Refinancing Loan-New Debt

Mortgage 1 is recorded to secure a debt amount described in Note 1-$500,000.  Tax is properly paid on $500,000. When the unpaid principal balance of the loan is $250,000 the mortgagor meets with their lender and signs Note 2 that describes an interest rate change and restates the unpaid balance of $250,000.

 

    Note 2 pays off Note 1 and Mortgage 1 is satisfied 

    Mortgage 2 is recorded to secure the debt amount described in Note 2-$250,000 

Does the document secure a new debt or increase an existing debt? ​Yes
​What is the document doing? ​Securing $250,000 of "new" debt
​Debt subject to tax? ​$250,000

 

Example 3: Amended and Restated Note and Mortgage-New Debt

Mortgage 1 is recorded to secure a debt amount described in Note 1-$5M.  Tax is properly paid on $5M.  When the unpaid principal balance is $3M, the mortgagor meets with their lender and signs Amended and Restated Note 1 that describes an interest rate change and an additional $2M advance to debtor.  The new unpaid principal debt is $5M.

    Mortgage 1 is not satisfied.

    Amended and Restated Mortgage 1 is recorded to secure the debt amount described in Amended and Restated Note 1.  

Does the document secure a new debt or increase an existing debt? ​Yes
​What is the document doing? ​Interest rate change and secures an additional $2M
​Debt subject to tax? ​$2M