Real Estate Transfer Taxes
A transfer tax is a tax imposed on the transfer of ownership of real estate.
This tax is typically based on the sale price of the property and is often paid by the seller, although this can vary by jurisdiction. The tax rate can be a percentage of the sale price or a fixed amount per thousand dollars of value. Some states or localities may not have a transfer tax at all, while others may have significant transfer taxes. These taxes are often used to fund local government services.
New York State transfer tax (outside NYC) is $2 per $500 (0.4%). Oregon has no state real estate transfer tax, but some localities may impose transfer taxes.
Know whether a state has a transfer tax and, if so, the general rate or calculation method. Be aware that some localities may also impose their own transfer taxes in addition to state taxes. Pay attention to whether the buyer or the seller typically pays the tax in that jurisdiction.
Related Terms
Practice Questions
Related Concepts
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.