Mortgage Registry Tax Amended and Supplemental Mortgages

Amended Mortgage

A mortgage amendment is not subjected to Mortgage Registry Tax (MRT).

A mortgage amendment is defined as any document that alters an existing mortgage and does not: (a) secure a new debt; or (b) increase the amount of an existing debt  (Minnesota Statutes 287.01).

A document that does one of the following meets the definition of an amendment:

• Extends time for payment of the unpaid portion of the original debt.
• Changes the interest rate.
• Adds additional real property as security for the unpaid portion of the debt.
• Releases some of the real property encumbered by the mortgage.
• Replaces all the real property encumbered by the mortgage with other real property.
• Replaces the party bound by the mortgage with a new party.
• Reduces the amount of debt secured by a mortgage, or in the case of a multi-state mortgage, reduces the percentage of real property encumbered by the mortgage that is located in this state.

Supplemental Mortgage

A supplemental mortgage increases the current balance of an existing debt and is subject to MRT. Tax is due on the "new" debt being secured.

Example

In 2016, a mortgage is recorded securing a non-revolving $1,000,000 debt.^. In 2017, when the existing indebtedness is $600,000, the lender provides the borrower with an additional $ 300,000 and modifies the mortgage accordingly. Tax is due on $300,000.