N.Y. Comp. Codes R. & Regs. tit. 20 § 643.2
Tax Law, § 250
The principal debt or obligation which is used as the basis for computing the taxes described in Part 642 of this Part is that portion of the purchase price under the contract that remains unpaid as of the date that the purchaser has or is entitled to possession of the real property under the contract.
Example:
X Corporation entered into an executory contract to sell a 10-unit apartment building located in Flushing, Queens County, New York City to Y for a purchase price of $600,000. On October 1, 1990 the contract was executed and pursuant to its terms Y was required to make a $60,000 down payment. The contract also provided that an additional payment of $100,000 was required on December 1, 1990, at which time Y was entitled to possession of the premises.
Y will be required to make 10 semi-annual payments over a five year period to X Corporation to pay the remaining balance due under the contract, with the final payment due on December 1, 1995. Upon receipt of the final payment X Corporation will deliver a deed to the subject premises to Y.
Since the executory contract between C Corporation and Y grants the purchaser possession of the real property prior to the delivery of the deed, such contract is a mortgage, the recording of which is subject to tax.
The taxes due upon the recording of this contract are computed as follows:
| Purchase price under the contract | $600,000 |
| Less: Downpayment - October 1, 1990 | $ 60,000 |
| Additional payment - December 1, 1990 | $100,000 |
| Total Subtractions | $160,000 |
| Total amount remaining unpaid at the time Y is entitled to possession - | |
| December 1, 1990 | $440,000 |
| Basic tax due (($440,000 ÷ $100) × $.50) | $ 2,200 |
| Additional tax (($440,000 ÷ $100) × $.25) | $ 1,100 |
| Special additional tax due (($440,000 ÷ $100) × $.25) | $ 1,100 |
| New York City tax due @ $1.00 rate (($440,000 ÷ $100) × $1.00) | $ 4,400 |
| Total taxes due | $ 8,800 |
N.Y. Comp. Codes R. & Regs. Tit. 20 § 643.2