Transfer Tax

Transfer tax is assessed by local or state governments on transfers of real property. Typically, when you buy or sell property, one of the parties (usually the seller) has to pay a transfer tax as title is transferred from one person or entity to another. The amount varies across states and among individual tax authorities. Certain states require buyers and sellers to share burden of transfer tax while other states have no such requirements (either the buyer or seller can negotiate to pay the transfer tax as part of the deal). The tax is commonly levied as a percentage of the mortgage amount or sales price, with the exception of some states that charge a flat fee. The federal government can also assess a transfer tax on transfers of property in the form of gift or estate tax.