Understanding Mount Vernon’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.
If you are selling or purchasing a home in Mount Vernon, you need to know how transfer taxes work. The Mount Vernon transfer tax isn’t complicated, but it can have an impact on your bottom line.
This short guide will help demystify transfer taxes, including who pays for them, how much they cost, when exemptions apply, and more.
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What are transfer taxes?
Real estate transfer taxes are charged by state or local governments when property ownership is transferred from one individual to another. According to the Federal Trade Commission, these taxes are due when the title of a property, essentially the document confirming legal ownership, is officially transferred to a new owner.
The amount owed in transfer taxes can vary significantly 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?
Transfer tax liability varies from city to city, state to state, and county to county. In New York State and Mount Vernon, the seller is generally responsible. However, the sales agreement can be modified so the buyer is responsible. It’s important to note that if the seller does not pay the transfer tax, or is somehow exempt, the buyer is responsible for it.
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 how it works in Mount Vernon.
State transfer taxes
According to the New York State Department of Finance, taxes are levied at $2.00 for every $500 of consideration. The state also has a “mansion tax,” which is an additional tax of 1% of the sale price applicable to residences with a value of $1 million or higher.
City transfer taxes
In Mount Vernon, the city transfer tax rate is 1.5%. This was increased from 1% in 2024, following a city ordinance.
Other transfer fees
Beyond transfer taxes, there may be additional fees to consider, such as those from a homeowner’s association or local neighborhood organization. Since these can vary widely 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.
According to the IRS, sellers have the option to treat paid transfer taxes as selling costs, allowing them to subtract these from their home’s closing sale price. By doing so, they can diminish the capital gains taxes owed on any profit earned.
Transfer tax exemptions in Mount Vernon
Some New York and Mount Vernon real estate transactions are exempt from transfer taxes.
These include:
- Real estate transfers between governmental entities
- Property changing hands on Native American land or between members of a Native American tribe
- Property in connection with a tax sale
- Used to secure a debt or other financial obligation
- Property sold for less than $50,000
These are just some examples. For a complete list, consult the New York Department of Taxation and Finance’s website or a real estate attorney.
Estimating transfer taxes for your home sale
If you are ready to sell your Mount Vernon home, consider using HomeLight’s Net Proceeds Calculator. This tool will help you calculate closing costs, such as transfer taxes and agent fees, and factor in any improvements made to the property, offering a clear estimate of your potential earnings from the sale.
You also might want to consider working with top real estate agent in Mount Vernon. They can provide you with valuable insights tailored to your needs. HomeLight can help you connect with a professional today, giving you the peace of mind you need to sell your home with ease.
Editor’s note: This post is intended for educational purposes only and does not serve as legal or financial advice. References to Mount Vernon area tax services or attorneys should not be interpreted as endorsements.
Header Image Source: (Samuel Charris/ Unsplash)
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