Real Estate Transfer Tax: Defined and Explained

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There are a number of fees involved in buying and selling a home, and real estate transfer taxes fall into this category. Curious about what transfer taxes are and what types of transfers incur these fees? Keep reading for answers!

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What is Transfer Tax?

When one person (or entity) transfers land or real property to another, the transaction may incur a transfer tax. The tax rate can vary by location and may depend on either the purchase price or the property's fair market value.

These transfers typically DO incur a transfer tax:

  • Typical real estate transactions, where ownership of the property is transferred between unrelated parties
  • Adding or removing a co-signer or co-owner for refinancing purposes
  • Transfers between parents and children

These transfers typically DO NOT incur a transfer tax:

  • Transfers between a married couple
  • Transfers between domestic partners
  • Transfers from an individual to/from his own trust
  • Transfers from an individual to/from his own Limited Liability Company (LLC), Limited Partnership (LP), or Corporation
  • Gifts
  • Inheritance

Have questions about city or county transfer taxes? Ask us!

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