Real estate transfer tax

Real estate transfer tax is a tax that may be imposed by states, counties, or municipalities on the privilege of transferring real property within the jurisdiction. Total transfer taxes range from very small (for example, .01% in Colorado) to relatively large (2.2% in the District of Columbia). [ [http://www.taxadmin.org/fta/rate/B-0306.pdf Transfer tax rates, by state, from the Federation of Tax Administrators] ]

Some states have a variety of transfer tax laws which may include specific exemptions for certain types of buyers based on buying status or income level (e.g. Maryland exempts certain "first time buyers" from a percentage of the total [ [http://www.dat.state.md.us/sdatweb/transfer.html Maryland transfer rates, by county] )] or excludes a portion of the property's sales price from taxation altogether).

Another variation which exists is either the legal requirement to split the taxes between the parties or the local custom to do so. Thus, in Washington, DC, the 2.2% is generally split between the seller and the buyer. Prior to buying or selling, it is advisable to check with the Recorder of Deeds, a Realtor, or title company to confirm a specific jurisdiction's practices.

ee also

*1031 exchange, IRC 1031 Tax-Deferred Exchange
*Real property
*Property rights
*Real estate broker and Estate agent
*Real estate appraisal
*Real estate economics
*Real estate pricing
*Real estate trends
*Housing bubble
*List of real estate topics
*National Association of Realtors

References


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