Real estate transfer tax
Encyclopedia
Real estate transfer tax is a tax
that may be imposed by states, counties, or municipalities on the privilege
of transferring real property
within the jurisdiction. Total transfer taxes range from very small (for example, .01% in Colorado
) to relatively large (4% in the city of Pittsburgh).
Some U.S. state
s have a variety of transfer tax laws which may include specific exemptions for certain types of buyers based on buying status or income level. For example, Maryland
exempts certain "first time buyers" from a percentage of the total or excludes a portion of the property's sales price from taxation altogether.
Another variation which exists is either the legal requirement to split the taxes between the parties or the local custom to do so. Thus, in Washington, DC, the 2.2% is generally split between the seller and the buyer.
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
that may be imposed by states, counties, or municipalities on the privilege
Privilege tax
A privilege tax is a tax levied in exchange for a privilege or license granted to the taxpayer. The fee for registering a motor vehicle is one example of a privilege tax....
of transferring real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
within the jurisdiction. Total transfer taxes range from very small (for example, .01% in Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
) to relatively large (4% in the city of Pittsburgh).
Some U.S. state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
s have a variety of transfer tax laws which may include specific exemptions for certain types of buyers based on buying status or income level. For example, Maryland
Maryland
Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...
exempts certain "first time buyers" from a percentage of the total or excludes a portion of the property's sales price from taxation altogether.
Another variation which exists is either the legal requirement to split the taxes between the parties or the local custom to do so. Thus, in Washington, DC, the 2.2% is generally split between the seller and the buyer.
See also
- 1031 exchange, IRC 1031 Tax-Deferred Exchange
- Real propertyReal propertyIn English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
- Property rights
- Real estate brokerReal estate brokerA real estate broker, real estate agent or realtor is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy...
and Estate agentEstate agentAn estate agent is a person or business that arranges the selling, renting or management of properties, and other buildings, in the United Kingdom and Ireland. An agent that specialises in renting is often called a letting or management agent... - Real estate appraisalReal estate appraisalReal estate appraisal, property valuation or land valuation is the process of valuing real property. The value usually sought is the property's Market Value. Appraisals are needed because compared to, say, corporate stock, real estate transactions occur very infrequently...
- Real estate economicsReal estate economicsReal estate economics is the application of economic techniques to real estate markets. It tries to describe, explain, and predict patterns of prices, supply, and demand...
- Real estate pricingReal estate pricingReal estate pricing deals with the valuation of real estate and all the standard methods of determining the price of fixed assets apply....
- Real estate trendsReal estate trendsReal estate trends is a generic term used to describe any consistent pattern or change in the general direction of the real estate industry which, over the course of time, causes a statistically noticeable change...
- Housing bubble
- List of real estate topics
- National Association of RealtorsNational Association of RealtorsThe National Association of Realtors , whose members are known as Realtors, is North America's largest trade association. representing over 1.2 million members , including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries...