Real estate transfer tax is a
tax that may be imposed by states, counties, or municipalities on the
privilege of transferring
real property
In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or aff ...
within the jurisdiction.
Rates
In the USA, total transfer taxes can range between very small (for example, .01% in
Colorado
Colorado (, other variants) is a state in the Mountain West subregion of the Western United States. It encompasses most of the Southern Rocky Mountains, as well as the northeastern portion of the Colorado Plateau and the western edge of the ...
) to relatively large (4% in the city of
Pittsburgh
Pittsburgh ( ) is a city in the Commonwealth (U.S. state), Commonwealth of Pennsylvania, United States, and the county seat of Allegheny County, Pennsylvania, Allegheny County. It is the most populous city in both Allegheny County and Wester ...
).
Some
U.S. state
In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sove ...
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 ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean t ...
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
)
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, image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morg ...
, the 2.2% is generally split between the seller and the buyer.
US States with no real estate transfer taxes
While many states levy a real estate transfer tax when a property title changes hands, several do not :
* Alaska
* Idaho
* Indiana
* Louisiana
* Kansas
* Mississippi
* Missouri
* Montana
* New Mexico
* North Dakota
* Oregon (most counties)
* Texas
* Utah
* Wyoming
See also
*
1031 exchange
Under Section 1031 of the United States Internal Revenue Code (), a taxpayer may defer recognition of capital gains and related federal income tax liability on the exchange of certain types of property, a process known as a 1031 exchange. In 197 ...
, IRC 1031 Tax-Deferred Exchange
*
Real estate economics
Real 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. The closely related field of housing economics is narrower in scope, con ...
*
Real estate pricing
Real estate appraisal, property valuation or land valuation is the process of developing an opinion of value for real property (usually market value). Real estate transactions often require appraisals because they occur infrequently and every prop ...
*
Housing bubble
A housing bubble (or a housing price bubble) is one of several types of asset price bubbles which periodically occur in the market. The basic concept of a housing bubble is the same as for other asset bubbles, consisting of two main phases. Firs ...
Further reading
* Bahl, R. (2004).
Property transfer tax and stamp duty' (No. paper0427). International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
References
{{Wiktionary
Transfer
Transfer tax