Real Estate Transfer Taxes: What Is This Little-Known Extra Cost to Sell Your Home?

The act of selling a house costs money. So even though you’re the one getting a big check, you’ll also receive a closing statement that lists out all of the charges you owe (how fun, right?) One little fee tacked onto your final settlement is the real estate transfer tax, also known as a deed transfer tax, stamp tax, conveyance tax, or a documentary transfer tax — and it’s not one many sellers instantly recognize.

Ultimately, the purpose of this tax is the same as others: to generate revenue for your state, county, or city (and sometimes all three). “In California, it’s a fact of life,” says Brett Wasserman, an associate attorney who handles real estate law at the legal offices of Marc Bronstein in Santa Monica, California. “When you have cities and states that have lots of services that they provide, they have to raise that revenue somehow.”

First we’ll take a look at this particular line item in your closing costs in the hope that better understanding this fee makes it less mentally taxing. Once you’ve got a firm foundation, consult our comprehensive chart with a list of the transfer tax rates for all 50 states.

A city hall that collects real estate transfer taxes.
Source: (Pascal Bernardon / Unsplash)

What are real estate transfer taxes?

A real estate transfer tax is a fee you pay to a state, county, or municipality for “the privilege of transferring real property within the jurisdiction,” according to Investopedia, a financial information website since 1999.

Depending on where you live, the tax can be a flat fee or an amount specified per every $100, $500, or $1,000 of the transferred property value. (Wasserman describes that as exclusive of any liens.) Arizona charges a flat fee of $2 while West Virginia charges $50, according to MidPoint, a National Title Company based in Cedar Park, Texas.

Most fees range from under a dollar per $100 or $500 to roughly $1 to $3 per $1,000 of the transferred net value. California’s Revenue and Taxation Code charges $1.10 per $1,000 of the transferred net value, or 55 cents per $500, Wasserman says.

Municipalities also have the ability to levy additional transfer taxes. In Los Angeles County, for instance, five cities charge an additional fee: $4.50 per $1,000 for Los Angeles and Culver City; $3 per $1,000 for Santa Monica; $2.20 for Pomona and Redondo Beach.

San Francisco charges varying fees based on the net sale price ranging from 0.5% for property up to $250,000 and 3.0% for property that nets more than $25 million, according to Viva Escrow, an escrow firm in Monrovia, California.

So if you sold a Santa Monica beach property for $2 million, you’d owe $2,200 to Los Angeles County and $6,000 to the City of Santa Monica — a total of $8,200 in what the state calls “documentary transfer tax.”

No wonder your real estate agent needs a calculator handy!

What’s more, some states charge additional transfer taxes based on an area’s population or vary the rate depending on whether the property being transferred is residential or agricultural, MidPoint notes.

Who pays transfer taxes at closing: the buyer or seller?

In the above example, the seller is on the hook for paying real estate transfer tax. But the municipality decides who pays what. Sometimes the buyer pays this tax, sometimes the seller does, and sometimes a buyer and seller split the cost.

In Chicago, Illinois, for example, the buyer pays $7.50 per $1,000 of the net sale while the seller pays $3 per $1,000 — a total of $10 per $1,000 of each sale, according to Craig Fallico, a veteran real estate agent serving the Chicago suburbs. (Illinois Realtors, a trade association that represents the state’s real estate practitioners, has a chart of Illinois real estate transfer taxes listed by municipality, so you can see the variations in just one area.)

Real estate transfer tax is something both parties can negotiate, much like other fees in a real estate transaction, Viva Escrow adds. The county recorder technically doesn’t care who files the fee, as long as it’s paid when the paperwork is filed, the company says.

Do any states NOT charge transfer taxes?

Thirteen states do not impose a real estate transfer tax. They include:

  • Alaska
  • Idaho
  • Indiana
  • Louisiana
  • Kansas
  • Mississippi
  • Missouri
  • Montana
  • New Mexico
  • North Dakota
  • Texas
  • Utah
  • Wyoming

Most of Oregon also has no real estate transfer tax. Only Washington County charges such a tax: $1 per $1,000 when the value of a property sale exceeds $13,999.

Curious to know how transfer taxes work in your state? We’ve pored through all 50 state legislature codes to bring you the exact tax rate that will be applied to your home sale (unless you lucked out in a no-tax state), who’s liable for the tax, and any additional local taxes you should be on the lookout for.

We’ve also pulled up the median home price for a major metro area in each state and did the math to give you a rough estimate of your state tax responsibility. County and municipal taxes vary by area so if you have them and are looking to pin down exact rates, your local Recorder of Deeds website — and your agent — are great places to start.

State Major metro median sales price State transfer tax estimate What’s it called? Rate Who pays it?
Alabama $252,000 (Birmingham) $ 630.00 Recordation tax $500 or less: $.50 cents

$.50 cents for each additional value or fraction of $500

Negotiable
Alaska n/a n/a n/a n/a n/a
Arizona n/a n/a n/a n/a n/a
Arkansas $195,500 (Little Rock) $ 215.06 Transfer tax $100 or less: no tax

Above $100: tax of $1.10 for each value or fraction of $1,000

Split equally between buyer and seller

(unless stated differently in contract)

Additional transfer tax $2.20 for each value or fraction of $1,000 Buyer
California $585,000 (Los Angeles) n/a Documentary transfer tax (optional county tax) $100 or less: no tax

Over $100: $.55 for each value or fraction of $500

Negotiable
Optional city tax $100 or less, no tax

Over $100, up to $.27 for each value or fraction of $500

*City tax can be applied as credit against county tax

Negotiable
Colorado $415,000 (Denver) $ 41.50 Documentary fee $500 or less: no tax

More than $500: $.01 for every $100 or fraction thereof

(may be locally imposed tax as well)

Negotiable
Connecticut $193,600 (Hartford) $1,452.00 Conveyance tax Less than $2,000: no tax

$2,000 and more: .75% of value

$800,000 and more: 1.25% tax on portion of the value over $800,000

Seller
Municipality tax $2000 and more: .25% of value Seller
Delaware $156,700 (Wilmington) $4,701.00 Transfer tax Less than $100: no tax

$100 or more: 3% of value, unless municipality or county requires 1.5% on their own, and if so, only 2.5%

First-time homebuyer: Deduct .5% off responsibility (usually 1.25%) to only owe state .75% of the value

Split equally between seller and buyer (first-time homebuyers’ discount deducted from their state portion)
Florida $325,000 (Miami) $1,950.00 Documentary stamp tax $.70 for each value or fraction of $100

Miami Dade County: $.60 for each value or fraction of $100 plus $.45 per $100 for all property that’s not a single family dwelling

Negotiable (both liable if not paid)
Georgia $352,500 (Atlanta) $ 352.50 Transfer tax $100 or less: no tax

Above $100: $1 for first $1,000 and $.10 for each additional or fraction of $100

Seller
Hawaii $945,000 (Honululu) $1,890.00 Conveyance tax $100 or less: no tax

> $100 – < $600,000: $.10 for each value of $100

$600,000- <$1 million: $.20 for each value of $100

$1 million<$2 million: $.30 for each value of $100

$2 million<$4 million: $.50 for each value of $100

$4 million-<$6 million: $.70 for each value of $100

$6 million<$10 million: $.90 for each value of $100

$10 million or greater: $1 for each value of $100

Seller
Idaho n/a n/a n/a n/a n/a
Illinois $298,000 (Chicago) $ 298.00 Transfer tax $.50 for each value or fraction of $500 Negotiable
County transfer tax (optional) Up to $.25 per $500 of value Negotiable
Municipal transfer tax (optional, only 5% of municipalities have one) Highest currently: Chicago with $10.50 for each value or fraction of $1,000 Depends on municipality
Indiana n/a n/a n/a n/a
Iowa $230,000 (Des Moines) $ 368.00 Transfer tax $500 or less: no tax

Over $500: $.80 for each additional value or fraction of $500

Seller
Kansas n/a n/a n/a n/a n/a
Kentucky $225,000 (Louisville) $ 225.00 Transfer tax $.50 for each value or fraction of $500 Seller
Louisiana n/a n/a n/a n/a n/a
Maine $325,000 (Portland) $1,430.00 Transfer tax $2.20 for each value or fraction of $500 Split between buyer and seller
Maryland $225,000 (Baltimore) $1,125.00 Transfer tax .5% of value.

First-time home buyers: .25% of value

Negotiable (if buyer is a first-time homebuyer, seller must pay)
County transfer tax (optional) Up to .5% of value
(no limit on charter counties)
Depends on county
Massachusetts $625,000 (Boston) $2,500.00 Excise tax $100 and under: no tax

$100-$500: $2.00 flat fee.

$500 and up: $2 per each value or fraction of $500

Seller
Michigan $165,000 (Detroit) $1,237.50 State transfer tax $100 or less: no tax.

Over $100: $3.75 for each value or fraction of $500

Seller
County transfer tax $100 or less: no tax

Over $100: $.55 for each value or fraction of $500 in counties with less than 2,000,000

No more than $.75 for each value or fraction of $500 in counties with 2,000,000 or more

Seller
Minnesota $250,000 (Minnesota) $ 825.00 Deed tax $3000 or less, flat rate of $1.65.

Over $3000, .0033 of net consideration

Seller
Hennepin and Ramsey Counties- additional Environmental Response Fund rate tax of .0001 of value
Mississippi n/a n/a n/a n/a n/a
Missouri n/a n/a n/a n/a n/a
Montana n/a n/a n/a n/a n/a
Nebraska $238,000 (Omaha) $ 535.50 Documentary stamp tax $2.25 for each value or fraction of $1,000 Seller
Nevada $289,000 (Las Vegas) $ 751.40 State transfer tax $100 or less: no tax.

Over $100: $1.30 for each value or fraction of $500

Negotiable (both liable if not paid)
County transfer tax $100 or less: no tax

Over $100: $.65 for each value or fraction of $500 for counties with population < 700,000

$1.25 for each value or fraction of $500 for counties with population 700,000 or more

Negotiable (both liable if not paid)
Additional county transfer tax (optional) $100 or less: no tax

Over $100: up to $.05 for each value or fraction of $500 for counties with population under 700,000

Negotiable (both liable if not paid)
New Hampshire $355,000 (Manchester) $2,663.00 Transfer tax $4000 or less: flat fee of $20 each

Over $4000: $.75 for each value or fraction of $100 (will be computed up to the nearest dollar amount)

Buyer and seller each owe stated tax separately
New Jersey $315,000 (Newark) $2,457.00 Realty transfer fee Less than $100: no fee

$100-$150,000: $2 for each value or fraction of $500

>$150,000 -$200,000: $3.35 for each value or fraction of $500

>$200,000-$350,000: $3.90 for each value or fraction of $500

>$350,000- $550,000: $4.80 for each value or fraction of $500

>$550,000- $850,000: $5.30 for each value or fraction of $500

>$850,000-$1,000,000: $5.80 for each value or fraction of $500

>$1,000,000: $6.05 for each value or fraction of $500

Negotiable (both liable if not paid)
Grantee transfer fee Over $1,000,000: 1% of value Buyer
n/a n/a n/a n/a n/a
New York $510,000 (New York City) $2,040.00 Transfer tax $500 or less, no tax

>$500, $2 for each $500 or fraction ofResidential properties

>$2,000,000 ($3,000,000 in cities with populations

>1,000,000) additional$1.25 for each value or fraction of $500

Seller primarily responsible, buyer secondarily responsible
Additional millionaire transfer tax $1,000,000 or more, additional tax of 1% of value Buyer primarily responsible, seller secondarily responsible
Supplemental tax for properties $2,000,000 or more in cities with population of 1,000,000 or more $2 million- <$3 million: .25% of value

$3 million-<$5 million: .5% of value

$5 million-<$10 million: 1.25% of value

$10 million- <$15 million: 2.25%

$15 million- <$20 million: 2.5%

$20 million- <$25 million: 2.75%

$25 million >: 2.9% of value

Buyer primarily responsible, seller secondarily responsible

*Additional NYC-specific taxes

North Carolina $294,000 (Charlotte) $ 588.00 Excise tax $1 for each value or fraction of $500 Seller
Land transfer tax No more than $1 for each value or fraction of $100 for Dare, Camden, Chowan, Currituck, Pasquotank, and Perquimans Counties Seller
North Dakota n/a n/a n/a n/a n/a
Ohio $230,000 (Columbus) $ 920.00 Transfer tax

Conveyance fee
$.30 for each value or fraction of $100$100 or less: no tax

Over $100: $.10 for each value or fraction of $100, or $1, whichever is greater

Seller

Seller

Oklahoma $162,900 (Oklahoma City) $ 244.35 Documentary stamp tax $100 or less, no tax

Over $100, $.75 for each value or fraction of $500

Seller
Oregon $430,000 (Beaverton) $ 430.00 Transfer tax (Washington County only) Less than $14,000: no tax

$14,000 and higher: $1 for each value or fraction of $1000

Negotiable (both liable if not paid)
Pennsylvania $242,000 (Philadelphia) $2,420.00 Realty transfer tax $100 or less: no tax

Over $100: 1% of value

Negotiable, but usually split (both liable if not paid)
Local realty transfer tax $100 or less: no tax

Higher than $100: up to 1% of value (home rule municipalities can tax more)

Negotiable, but usually split (both liable if not paid)
Rhode Island $230,000 (Providence) $1,058.00 Real estate conveyance tax $100 or less: no tax

Higher than $100: $2.30 for each value or fraction of $500

Seller (unless otherwise designated in contract)
South Carolina $240,000 (Greenville) $ 888.00 Deed recording fee $100 or less: no tax

Over $100: $1.85 for each value or fraction of $500

Seller primarily responsible, buyer secondarily responsible
South Dakota $219,900 (Rapid City) $ 219.90 Transfer fee $.50 for each value of fraction of $500 Seller
Tennessee $315,000 (Nashville) $1,165.50 Recordation tax (transfer of realty) $.37 for each value of $100 dollars

(County register can impose $1.00 processing fee)

Buyer
Texas n/a n/a n/a n/a n/a
Utah n/a n/a n/a n/a n/a
Vermont $339,950 (Burlington) $4,979.03 Transfer tax .5% on first $100,000

1.25% on amount exceeding $100,000

.2% clean water surcharge on the amount exceeding $100,000

*Different rates for USDA, VA, and non-principal properties

Buyer
Virginia $630,000 (Arlington) $ 945.50 Recordation tax

 

Grantor Tax

$100 or less, no tax

Over $100, $.25 for each value or fraction of $500 (Deed of release tax fee: $.50)

$100 or less, no tax

Over $100, $.50 for each value or fraction of $500″

Negotiable (typically buyer)

Seller

Optional city or county recordation tax Up to 1/3 of the state recordation tax Typically buyer
Washington $751,000 (Seattle) $9,612.80 Real estate excise tax $500,000 or less: 1.1% tax rate

>$500,000- $1.5 million: 1.28% of value

>$1.5 million- $3 million: 2.75% of value

>$3 million: 3% of value

Seller primarily responsible, buyer secondarily responsible
West Virginia $448,840 (Charleston) $1,672.20 State excise tax $100 or less: no tax

Over $100, $1.10 for each value or fraction of $500

*Also, $20 assessment fee for all transfers

Seller primarily responsible, buyer secondarily responsible
County excise tax $100 or less, no tax

>$100, $.55 for each value or fraction of $500

(counties may add up to $1.65 for each value or fraction of $500)

Seller primarily responsible, buyer secondarily responsible
Wisconsin $185,429 (Milwaukee) Transfer fee $ 556.29 $1,000 or less: no fee

More than $1,000, $.30 for each value or fraction of $100

Seller
Wyoming n/a n/a n/a n/a n/a
A couple that won't pay real estate transfer tax.
Source: (Stephanie Liverani / Unsplash)

Are there any exceptions to paying transfer taxes?

There are, although you should check with your real estate agent, a real estate attorney, or a tax professional for specifics related to where you live.

Let’s look at California again as an example. Because California specifies that the sale has to be a “conveyance for value,” any property that doesn’t meet that definition isn’t charged transfer tax, Wasserman says.

So if property changes owners during a marital dissolution, there’s no transfer tax, he says. Property secured as part of a debt or foreclosure? No transfer tax.

Property transferred into a trust? No transfer tax. Other situations where the transfer tax doesn’t apply include property that spouses own 50-50 that they want to transfer into an LLC. “The proportional interest remains the same,” Wasserman says.

Property given as a gift in California also is not subject to transfer tax, he says.

However, some states charge estate or inheritance taxes in this situation. Iowa, Nebraska, Kentucky, and Pennsylvania charge inheritance taxes; Maryland and New Jersey charge both estate and inheritance taxes, meaning the recipient and the deceased’s estate each pay a fee, Investopedia says. That’s why it’s important to consult with a local expert about your tax laws.

So, a real estate transfer tax is just a processing fee?

In some areas, real estate transfer tax is considered a fee for processing the transfer paperwork, even though “you don’t need to pay $1,000 or $2,000 to put a stamp on the property,” Fallico says. “It’s what you do for closing. It’s what you pay, just like you pay interest on a loan.”

Some municipalities require a “point of sale” or occupancy inspection in addition to the home inspection, so the payer feels like they’re receiving something in exchange for the tax, Fallico says. “An inspector comes out and looks at the electrical, looks at the plumbing, makes sure that you didn’t do additions to the property and are paying your fair share of taxes.”

However, some municipalities also add on processing fees. In Santa Monica, the county recorder’s office charges a recording fee of about $28 for the first page and roughly $7 per page thereafter, Wasserman says.

The District of Columbia has a deed recordation tax of 1.45% or 1.1% for values up to $400,000, as well as a deed transfer tax of the same amount.

Are transfer taxes tax-deductible?

Unlike property taxes, which you can deduct up to $10,000, you cannot deduct transfer taxes or stamp taxes on the sale of a personal home, according to the Internal Revenue Service. If you’re a buyer and pay them, they’re included in the cost basis of the property. If you’re the seller and pay them, they’re expenses of the sale and “reduce the amount realized on the sale,” the IRS says.

A house that paid real estate transfer tax.
Source: (Tristan Gevaux / Unsplash)

Criticisms of the transfer tax

The National Association of Realtors (NAR) historically has opposed real estate transfer taxes, calling them a “major burden to buyers and sellers.”

The NAR says these taxes are “volatile” in nature, making them a poor revenue source for municipalities. The association also says real estate transfer taxes reduce housing opportunities overall and place an added burden on low-income families and those who move often.

NAR has proposed exempting first-time homebuyers and those from low- and moderate-income households from transfer taxes.

New Jersey has reduced transfer tax rates for sellers of low- and moderate-income housing who are senior citizens, blind, or have disabilities. This reduced rate ranges from 50 cents to $3.40 per $500, MidPoint says.

The District of Columbia reduces its deed recordation tax for first-time homebuyers to 0.725% for values up to $400,000; they still must pay a deed transfer tax of 1.45% or 1.1% for values up to $400,000.

Real estate transfer taxes are but one slice of the fees and costs associated with selling your home from start to finish. (HomeLight has a handy Net Proceeds Calculator that breaks down all these fees, so you can estimate your final payout.)

Talk with your real estate agent, a tax professional, or an attorney about any exemptions to transfer taxes relevant to your situation, so they can answer all your questions before it’s time to sign on the dotted line.

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