Understanding Kern County’s Transfer Tax: A Quick Guide
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Knowing the full impact of real estate transfer taxes is important when selling your property in Kern County. Transfer taxes are fees levied by local or state authorities whenever ownership of a property changes hands. While not complicated, these taxes differ across city and state guidelines, so it’s good to know the specifics for your location.
This guide will explain how transfer taxes work in Kern County, detailing the various types and what sellers should expect to pay. We will also discuss what exemptions you can qualify for.
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What are transfer taxes?
Real estate transfer taxes are charges imposed by state or local governments when property ownership is transferred from one individual to another.
According to the Federal Trade Commission, these taxes are incurred when the title to a property, essentially the document that verifies your legal ownership, is officially transferred to a new owner. The amount owed in transfer taxes can vary widely based on the property’s location, as different states, counties, and cities establish their own rates and regulations. Transfer taxes primarily serve as a revenue source for local and state governments, funding various public services and infrastructure projects.
Who pays for transfer taxes?
Sellers are required to pay for transfer taxes in Kern County.
What are the types of transfer taxes?
Transfer taxes typically vary according to local regulations but can generally be categorized into three types — state, city, and county, depending on the state. Here’s a brief overview of how it works in Kern County.
State transfer taxes
For property transfers in California, a documentary transfer tax of $0.55 for every $500 of home value is applied.
County transfer taxes
In Kern County, the county transfer tax rate is also $0.55 per every $500 of the home’s sales price.
Other transfer fees
Beyond transfer taxes, there may be additional fees to consider, such as those from a homeowner’s association or other local organizations. Since these can vary greatly by location, consulting a professional is advisable.
If you’re selling your home without a realtor, seeking professional advice can clarify some of the nuances of the process and provide a clearer picture of what to expect regarding the pros and cons of selling a house without a realtor.
Are transfer taxes deductible?
Transfer taxes are, unfortunately, not eligible for tax deduction.
However, you might be able to lower the amount you pay in capital gains taxes.
Capital gains, defined as the profit obtained from the sale of your home or the financial gain from selling your property, are subject to federal taxation just like profits from the sale of other assets.
Sellers have the option to treat paid transfer taxes as selling costs, allowing them to subtract these from their home’s closing sale price, according to the IRS. By doing so, they can minimize the capital gains taxes owed on any profit earned.
Kern County transfer tax exemptions
Not every Kern County real estate transaction requires transfer taxes to be paid. If the property is offered as a gift or the deed is transferred due to a trust being terminated, it is exempt.
These are just a couple of examples. For a complete list, consult the Kern County Documentary Transfer Tax Exemptions form.
Estimating Kern County transfer taxes
To get a better idea of what you’ll earn from selling your Kern County home, consider using HomeLight’s Net Proceeds Calculator. This tool accounts for essential expenses such as closing costs, transfer taxes, agent commissions, and any improvements made to the property, giving you a solid estimate of your potential profit.
Additionally, collaborating with a top real estate agent can provide valuable insights tailored to your situation. HomeLight can connect you with a trusted Kern County professional today, giving you peace of mind as you sell your home.
Editor’s note This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of Kern County area tax services or attorneys should not be considered endorsements.
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