President Obama’s commitment to have 1-4 million loan modifications prevent foreclosure raises a related issue of intangible tax avoidance.
Currently in the state of Georgia, as well as other states, there is a charge to those individuals who refinance one loan and replace it with another. This charge is called an intangibles tax in Georgia and is $1.50 for every $500 of “new” loan.
However, under current Georgia Code 560-11-8-.05(1), if a new instrument between original borrower and lender is involved that was originally taxed, then no intangibles tax is charged. However, will the loan be modified with the same lender or with Fannie Mae or Freddie Mac and get charged for an intangibles tax?
But don’t tell the Georgia General Assembly to change it or there may be more state revenue to gain – shhhhh!
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