How to Calculate Mortgage Tax

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According to the Tax Policy Center, seven states charge taxes on mortgages: Kansas, Alabama, Minnesota, Oklahoma, Tennessee, New York and Florida. In New York, the lender is required to pay part of the mortgage tax, but you can try to negotiate for the lender to pay more of it as part of the mortgage process. The taxes can either be paid to the lender, who then passes the money to the state department of revenue, or paid directly to the state.

Things You'll Need

  • Calculator
  • Tax Rate Table

Divide the total amount of the mortgage by 100 if you live in Oklahoma, Tennessee, New York, Minnesota, Kansas or Florida. Divide the property value by 100 if you live in Alabama.

Round the number up to the next whole number. For example, if you calculated your answer to be 1,401.63, you would round up to 1,402.

Determine your tax rate by using the tax rate table (see References). For example, as of 2009, Florida charged $0.35 for every $100 of the mortgage.

Multiply the number you calculated in Step 2 by the rate you found in Step 3 to determine your tax bill. For example, if you took out a $100,000 mortgage in Florida, your tax bill would be $350.

Tips & Warnings

  • Tennessee exempts the first $2,000 of the loan from the mortgage tax.
  • Oklahoma uses a series of tax rates based on the length of the mortgage. The longer the mortgage, the higher the tax rate you pay.

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