Transfer tax
A tax charged by the state, county, or city when property changes hands. Sometimes paid by the seller, sometimes by the buyer, sometimes split. Rates vary widely.
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Why a seller cares
The state, county or city may tax the transfer itself, and who pays is set by custom and the contract. On a $300,000 sale it ranges from nothing to several thousand dollars, and it is on the settlement statement.
Part 2 of 4
A simple example
A $300,000 sale in a state with a 1% transfer tax split by custom. $1,500 comes off your proceeds and the buyer pays $1,500.
| Where the sale is | What the transfer tax tends to be |
|---|---|
| A state with no transfer tax | Nothing |
| A state at 0.5% paid by the seller | $1,500 on $300,000 |
| A city with its own tax on top | Sometimes several thousand more |
Transfer tax is local, and it is one of the lines that makes closing costs vary so much by state.
Part 3 of 4
What people get wrong
That the seller always pays it. Custom differs by state, and the contract can move it either way.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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