Understanding Sonoma 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.
If you’re selling your Sonoma County home, you’ll want to know how transfer taxes work. Transfer taxes are fees levied by local governments when a property changes ownership. While these fees aren’t complicated, they differ by municipality, so there isn’t a one-size-fits-all answer to them.
Not to worry. This short guide will break down how the Sonoma County transfer tax works and what you can expect when selling your home. We will also tell you about possible exemptions you might qualify for.
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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?
Real estate transfer taxes are fees 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 due 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 significantly based on the property’s location, as different states, counties, and cities have established their own rates and regulations. Transfer taxes primarily serve as a means for local and state governments to generate revenue and fund various public services and infrastructure projects.
Who pays for transfer taxes?
Sellers pay for transfer taxes in Sonoma 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. Here’s a brief overview of how they work in Sonoma County.
State transfer taxes
For property transfers in California, a documentary transfer tax of $0.55 per $500 (or $1.10 per $1,000) of the home’s sales price is applied. However, additional taxes may apply depending on your specific location in California.
County transfer taxes
In Sonoma County, the county transfer tax rate is $0.55 per $500 (or $1.10 per $1,000).
City transfer taxes
For cities in Sonoma County like Santa Rosa and Petaluma, there is an additional transfer tax of $2.00 per $1,000 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 local neighborhood organization. Since these can vary widely based on 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 lessen the capital gains taxes owed on any profit earned.
Sonoma County transfer tax exemptions
Not every Sonoma County real estate transaction is subject to transfer taxes. Some are exempt. Here are some of the most common exemptions you can expect to encounter in Sonoma County:
- Court-ordered deed transfers
- Gifts
- Transfers between spouses
- Transfers to or from the United States
For a complete list of exemptions, consult the list of exemptions on the Sonoma County Recorder’s website.
Estimating transfer taxes for your home sale
To better estimate the potential proceeds from selling your Sonoma County home, consider using HomeLight’s Net Proceeds Calculator. This tool accounts for essential costs such as closing expenses, transfer taxes, agent fees, and any improvements made to the property, providing you with a good idea of your potential earnings from the sale.
Additionally, collaborating with a top real estate agent can offer valuable insights tailored to your specific situation. HomeLight can connect you with a Sonoma County real estate professional today, who can help you sell your home quickly and easily.
Editor’s note: This post is for educational purposes only and does not constitute legal or financial advice. References to Sonoma County area tax services or attorneys should not be viewed as endorsements.
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