1997 Minnesota Statutes

     287.05 Tax on recordation or registration; supplemental 
  mortgages; reverse mortgages. 

    Subdivision 1.    Tax imposed.  A tax of 23 cents is 
 imposed upon each $100, or fraction thereof, of the principal 
 debt or obligation which is or may be secured by any mortgage of 
 real property situated within the state executed, delivered, and 
 recorded or registered; provided, however, that the tax shall be 
 imposed but once upon any mortgage and extension thereof.  If 
 the mortgage describes real estate situated outside of this 
 state, the tax shall be imposed upon that proportion of the 
 whole debt secured thereby as the value of the real estate 
 therein described situated in this state bears to the value of 
 the whole of the real estate described therein.  The tax imposed 
 by this section shall not apply to a contract for the conveyance 
 of any interest in real estate. 

    Subd. 2.    Supplemental mortgages.  Any supplemental 
 mortgage, not including revisions to a reverse mortgage as 
 described under subdivision 6, securing a portion or all of the 
 same indebtedness, whether or not additional security is 
 included, shall be taxed in the following manner: 

    (a) Any additional indebtedness shall be taxed on the ratio 
 that the value of the real estate therein described in this 
 state bears to the value of the whole of the real estate 
 described therein.  

    (b) If there is no additional indebtedness but the 
 percentage of the Minnesota real estate as compared to the total 
 real estate secured by the previous mortgage is increased, the 
 tax shall be recomputed and paid on the remaining indebtedness 
 multiplied by the difference between that percentage of 
 Minnesota real estate included in the supplemental mortgage and 
 that percentage included in any previous mortgage.  

    (c) In the event of both an increase in the indebtedness 
 and a change in the Minnesota percentage of real estate given as 
 security, the tax shall be recomputed on the portion 
 representing new indebtedness in the manner provided in (a) and 
 in the event of an increase in the percentage of Minnesota 
 property included as security, the tax shall be computed on the 
 remaining portion of the indebtedness as provided in (b).  

    Subd. 3.    Revolving lines of credit.  When a mortgage, 
 including a reverse mortgage, secures a revolving line of credit 
 under which advances, payments, and readvances may be made from 
 time to time, the tax imposed under subdivision 1 shall be paid 
 on the maximum amount of the line of credit which may be secured 
 at any one time, as expressed in the mortgage, regardless of the 
 time or amount of advances, payments, or readvances.  

    Subd. 4.    Advances by mortgagee.  No tax under 
 subdivision 1 shall be paid on the indeterminate amount which 
 may be advanced by the mortgagee in protection of the mortgaged 
 premises or the mortgage, including taxes, assessments, charges, 
 claims, fines, impositions, insurance premiums, amounts due upon 
 prior or superior mortgages and other prior or superior liens, 
 encumbrances and interests, and legal expenses and attorneys' 
 fees.  

    Subd. 5.    Indeterminate amounts.  When a mortgage 
 secures an indeterminate amount other than those described in 
 subdivision 3, 4, or 6, no tax shall be paid at the time the 
 mortgage is recorded or registered, but the tax must be paid at 
 the time of recording or filing an affidavit stating the amount 
 and time of the actual advance.  

    Subd. 6.    Reverse mortgages.  If real property secures 
 a reverse mortgage, the principal debt or obligation to which 
 mortgage registry tax applies is the expected total 
 disbursements or cash equivalent to be made under the terms of 
 the loan.  Interest accruing on the disbursements made is not 
 subject to mortgage registry tax.  In the case of periodic 
 payments made for an indefinite length of time, the expected 
 total disbursements must equal the product of the periodic 
 payment amounts and the number of payments and, if applicable, 
 the amount of cash distribution or its equivalent.  The number 
 of payments must be based upon the life expectancy assumption 
 used in determining the payment amount.  In the case of reverse 
 mortgages made as part of the Housing and Community Development 
 Act of 1987, section 255 of the National Housing Act, and 
 administered by the Department of Housing and Urban Development 
 (HUD), mortgage registry tax must not be assessed on Federal 
 Housing Administration mortgage insurance premiums, monthly 
 lender service fees, or payments to be distributed to the 
 borrower by HUD.  

    HIST: (2323) 1907 c 328 s 2; 1913 c 163 s 1; 1917 c 73 s 1; 
 1921 c 445 s 1; 1945 c 288 s 1; 1951 c 591 s 1; 1957 c 167 s 1; 
 1961 c 499 s 1; 1967 c 340 s 2; 1973 c 582 s 3; 1983 c 342 art 2 
 s 24; 1984 c 502 art 14 s 7-9; 1Sp1985 c 14 art 11 s 1; 1987 c 
 268 art 14 s 13; 1987 c 403 art 2 s 147; 1991 c 291 art 20 s 2