There are a number of fees involved in buying and selling a home, and real estate transfer taxes fall into this category. Curious about what transfer taxes are and what types of transfers incur these fees? Keep reading for answers!
What is Transfer Tax?
When one person (or entity) transfers land or real property to another, the transaction may incur a transfer tax. The tax rate can vary by location and may depend on either the purchase price or the property’s fair market value.
These transfers typically DO incur a transfer tax:
- Typical real estate transactions, where ownership of the property is transferred between unrelated parties
- Adding or removing a co-signer or co-owner for refinancing purposes
- Transfers between parents and children
These transfers typically DO NOT incur a transfer tax:
- Transfers between a married couple
- Transfers between domestic partners
- Transfers from an individual to/from his own trust
- Transfers from an individual to/from his own Limited Liability Company (LLC), Limited Partnership (LP), or Corporation
- Gifts
- Inheritance
Have questions about city or county transfer taxes? Ask us!