2007 Minnesota Statutes

287.05 DETERMINATION OF TAX IN SPECIAL SITUATIONS.
    Subdivision 1. Real property outside Minnesota. (a) When a multistate mortgage is
intended to secure only a portion of a debt amount recited or referred to in the mortgage,
the mortgage may contain the following statement, or its equivalent, on the first page:
"Notwithstanding anything to the contrary herein, enforcement of this mortgage in Minnesota is
limited to a debt amount of $....... under chapter 287 of Minnesota Statutes." In such case, the
tax shall be imposed based only on the amount of debt so stated to be secured by real property
located in this state; and, the effect of the mortgage, or any amendment or extension, as evidence
in any court in this state, or as notice for any purpose in this state, shall be limited to the amount
contained in the statement and for which the tax has been paid and additional amounts for accrued
interest and advances not subject to tax under subdivision 4 or section 287.035.
(b) All multistate mortgages not taxed under paragraph (a) shall be taxed under sections
287.01 to 287.13 as if the real property identified in the mortgage secures payment of that portion
of the maximum debt amount referred to, or incorporated by reference, in the mortgage that is
equal to a fraction the numerator of which is the value of the real property described in the
mortgage that is located in this state and the denominator of which is the value of all the real
property described in the mortgage.
    Subd. 1a. Real property in this state secures portion of debt. (a) When the real property
identified in a mortgage is located entirely in this state and is intended to secure only a portion of
a debt amount recited or referred to in the mortgage, the mortgage may contain the following
statement, or its equivalent, on the first page: "Notwithstanding anything to the contrary herein,
enforcement of this mortgage is limited to a debt amount of $....... under chapter 287 of Minnesota
Statutes." In such case, the tax shall be imposed based only on the amount of debt so stated to
be secured by real property; and, the effect of the mortgage, or any amendment or extension, as
evidence in any court in this state, or as notice for any purpose in this state, shall be limited to the
amount contained in the statement and for which the tax has been paid and additional amounts for
accrued interest and advances not subject to tax under subdivision 4 or section 287.035.
(b) All mortgages that are not multistate mortgages and that are not taxed under paragraph
(a) shall be taxed under sections 287.01 to 287.13 as if the real property identified in the mortgage
secures payment of the maximum debt amount referred to, or incorporated by reference, in the
mortgage.
    Subd. 2. Supplemental mortgages. Except for an amendment or a revision to a reverse
mortgage as described under subdivision 6, any document that alters an existing mortgage by
providing for an increase in the amount of debt secured by real property located in this state, or, in
the case of a multistate mortgage described in subdivision 1, paragraph (b), an increase in the
percentage of Minnesota real estate as compared to the total real estate that is encumbered by
the mortgage, shall be taxed based upon the increase in the amount of the debt determined to be
secured by real property located in this state under either subdivision 1 or 1a.
    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 section 287.035 must be paid on the maximum amount of
the line of credit that 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 section 287.035 shall be paid on the
indeterminate amount that may be advanced by the mortgagee in protection of the mortgaged
premises or the mortgage, including taxes, assessments, charges, claims, fines, impositions, and
insurance premiums; the 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, but the tax must be paid at the time of recording an affidavit or other document 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.
    Subd. 7. Mortgages to secure obligations to be issued. If a mortgage is made to a
mortgagee in trust to secure the payment of bonds or other obligations yet to be issued, a statement
may be incorporated in the mortgage stating the amount of the obligations already issued or yet to
be issued, and the tax to be paid on filing the mortgage for recording must be computed upon
the amount so stated. The statement must be binding and conclusive upon all persons claiming
through or under the mortgage, and no such obligation issued in excess of the aggregate so fixed is
valid for any purpose unless the additional tax is paid and receipted by the proper county treasurer.
    Subd. 8. Amendments. An amendment may contain the following statement, or its
equivalent, on its first page: "This is a mortgage amendment, as defined in Minnesota Statutes,
section 287.01, subdivision 2, and as such it does not secure a new or an increased amount of
debt." In such cases, the document will be treated as a mortgage amendment, as defined in section
287.01, subdivision 2, for all purposes and does not serve to secure a new or an increased
amount of debt.
History: (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; 1999 c 31 s 5; 1999 c 243 art 16 s 12,13