FACTS: Harold transfer an apartment building to Realco, a building and loan association, in order to secure a loan on the building. When the loan is paid off, Realco reconveys the building to Harold.

ISSUE: Is Harold's conveyance of the building to Realco or Realco's reconveyance to Harold subject to the Massachusetts deeds excise?

DISCUSSION: Massachusetts imposes an excise upon the transfer of any deed, instrument or other writing whereby realty sold is conveyed to a purchaser. G.L. c. 64D, § 1. The excise is based upon the consideration given for the property and applies whenever the consideration, exclusive of any lien or encumbrance remaining on the property, is greater than $100. The tax is paid by the person making or signing the deed and is evidenced by an affixed stamp. As of July 1, 1989, the tax is $2.00 for each $500, or fraction, of consideration plus an additional tax of 14% of the tax imposed, i.e., $2.28/$500, except in Barnstable County where the rate, including surtax, is $2.85/$500. The rates are currently scheduled to change on July 1, 1992. The excise does not apply, however, to any instrument or writing given to secure a debt, G.L. c. 64D, § 1. By necessary extension, it also does not apply to the reconveyance of the property to its owner as part of the loan transaction. See Treas. Reg. § 47.4361-2(a)(6), (b)(1).

DIRECTIVE: Since Harold's conveyance of the building to Realco was to secure a debt, neither Harold's conveyance to Realco nor Realco's conveyance to Harold is subject to the Massachusetts deeds excise.

REFERENCE: G.L. c. 64D, § 1; Treas. Reg. § 47.4361-2(a)(6), (b)(1).

/s/Stephen W. Kidder
Stephen W. Kidder
Commissioner of Revenue

December 11, 1989

DOR-D 89-12


This Directive represents the official position of the Department of Revenue on the application of the law to the facts as stated. The Department and its personnel will follow this Directive, and taxpayers may rely upon it, unless it is revoked or modified pursuant to 830 CMR 62C.01(5)(e). In applying this Directive, however, the effect of subsequent legislation, regulations, court decisions, Directives, and TIRs must be considered, and Department personnel and taxpayers may rely upon this Directive only if the facts, circumstances and issues presented in other cases are substantially the same as those set forth in this Directive.