Say that a buyer is purchasing a $1 million condominium unit and is using a purchase CEMA mortgage. In this example, the seller has a residual mortgage balance of $400,000. The buyer wants to finance at 80% loan-to-value (LTV) and will therefore need a total loan of $800,000. However, because the seller is able to transfer his existing $400,000 loan balance to the buyer, the buyer as a result only needs to take out a new mortgage of $400,000. The two loans are consolidated under the new borrower, but the buyer is able to pay mortgage recording tax on only $400,000 versus $800,000. The savings are quite significant in this example for the buyer. The mortgage recording tax on $800,000 would be $17,400 while the mortgage recording tax on $400,000 would only be $8,200. Keep in mind that because the new loan was under $500,000, it was also taxed at a lower rate! That’s $9,200 in savings, or approximately 53% in mortgage recording tax avoided!