Understanding Solano County’s Transfer Tax: A Quick Guide
- Published on
- 4 min read
-
Joseph Gordon EditorClose
Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Are you a Solano County homeowner looking to sell your home? Maybe you’re thinking about buying your first home. In either case, you might be unaware of how transfer taxes work.
These are fees charged when real property (like a home) changes hands, varying across state, city, and county lines. There is a Solano County transfer tax, and it’s a good idea for any prospective seller or shopper to get an idea of how it works, as transfer taxes are an essential part of your closing costs.
This quick guide will cover the Solano County transfer tax, giving you insight into what it is, how much you can expect to owe, and whether you can qualify for any exemptions.
Connect with a Top Agent to Help Maximize Value
Even rockstar agents can’t make your tax liability disappear, but HomeLight data shows that the top 5% of agents across the U.S. help clients sell their home for as much as 10% more than the average real estate agent, helping offset the tax bill.
What are transfer taxes?
Transfer taxes, as defined by the Federal Trade Commission, are a “
Essentially, when you pass the title of your home — your legal right to own the property — to someone else, the government charges a tax on this exchange.
Where your property is located will determine what you’ll owe in transfer taxes according to local state, county, or city guidelines. Like other taxes, these are designed to generate revenue.
Who pays for transfer taxes?
Different cities and states have different guidelines concerning the liability of transfer taxes, and Solano County is no different. In Solano County, the seller pays for transfer taxes. This is usually the case with most municipalities in California.
What are the types of transfer taxes?
Transfer taxes will typically vary based on local guidelines but can generally be broken down into three categories — state, city, and county, depending on the state. Here’s a quick look at how it works in Solano County:
State transfer taxes
California levies transfer taxes at $0.55 per $500 of the property’s sales price. This tax is levied statewide and applies to any property transaction in the Golden State, unless the transaction qualifies for exemptions.
City transfer taxes
If you are selling a home in Vallejo, a city in Solano County, you must pay an additional transfer tax of $1.65 for every $500 of the property’s purchase price.
County transfer taxes
Solano County’s transfer tax is levied at the same rate as the statewide transfer tax — $0.55 per $500. This is the case for most counties in California, but there are some exceptions, like Los Angeles County.
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 for Solano County
You might be eligible for an exemption from paying transfer taxes in Solano County. Here are a few examples where your transaction might be off the hook from paying this fee:
- Property transferred as a gift (no consideration involved)
- Deeds to or from a trust, when not related to a sale
- Deeds executed upon the termination of a trust
- Deeds confirming title already held by the grantee
- Deeds executed by an executor under a will
- Deeds from an agent to their principal when purchased with the principal’s funds
- Standard leases and lease assignments for a defined term
- Deeds to a trustee for the benefit of creditors
- Transfers to a court-appointed receiver and reconveyances after receivership ends
For a complete list, consult Solano County’s transfer tax documentation.
Estimating transfer taxes for your Solano County home sale
Ready to sell your Solano County home? It might be a good idea to consult HomeLight’s Net Proceeds Calculator. This calculator will factor in various closing costs, including transfer taxes, to give you a solid estimate of what you can expect when selling your home.
You also might want to consider working with a top Solano County real estate agent. HomeLight can connect you with a trusted professional today, giving you the peace of mind you need to sell your home with confidence.
Editor’s note: This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of Solano County area tax services or attorneys should not be considered endorsements.
Header Image Source: (Bruno Guerrero/ Unsplash)
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
