We do our best to stay up to date on reverse mortgage legislation but every once and a while something slips by and the Reverse Mortgage Fairness Act of 2009 is a perfect example. New York’s Govenor signed A08305 in July and the bill became effective Oct. 26, 2009.
The bill amended Banking Law and Real Property Tax Law to prohibit proceeds received from reverse mortgage from being considered as income for the purpose of senior citizens’ partial property tax exemption authorized by section 467 of the Real Property Tax Law.
The bill also states that monies used to repay a reverse mortgage may not be deducted from income, and further that any interest or dividends realized from the investment of reverse mortgage proceeds shall be considered income.
“We wanted to create a system where seniors could better utilize the equity in their homes and remain eligible for vital tax exemptions,” said New York State Senator Hiram Monserrate.
“As we try to recover from this national economic slowdown, we need to better protect homeownership and reward property owners who have planned for the golden years the right way,” added Monserrate.
