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What Are Real Estate Transfer Taxes?

October 3, 2023
Bill Kimball

However, if the seller doesn’t pay the tax, or is exempt from the tax, the buyer must pay the tax. For additional details on how to claim a new Real Property Transfer Tax (“RPTT”) exemption for transfers of real property subject to certain affordable housing restrictions, click here. With that background, we can now examine some jurisdictions which have a documentary transfer tax system that expands on the tax imposed under the Act. In case of an exchange of two properties, the deeds transferring title to each are subject to tax, and in each case, shall be computed on the basis of the actual value of the property conveyed. Please note that the Assessor-Recorder may transmit deeds and tax affidavits for all claimed gift exemptions to the Internal Revenue Service. Questions regarding gift tax should be directed to the Internal Revenue Service or your financial advisor. Transfer taxes generally are not due as long as the proportional ownership interests remain exactly the same before and after the transfer.

In case of an exchange of two properties, the deeds transferring title to each are subject to Michigan Real Estate Transfer tax, and in each case shall be computed on the basis of the actual value of the property conveyed. Gift taxes, on the other hand, are paid when a gift of any kind of property is given to another without repayment, provided the gift is valued over a certain threshold. Bankrate.com is an independent, advertising-supported publisher and comparison service.

Real Property Transfer Tax Rptt

If the deed or document isn’t being recorded, file Form TP-584 or TP-584-NYC and pay any tax due directly to the Tax Department no later than the 15th day after the delivery of the document. Mail Form TP-584 or TP-584-NYC with any attachments and payment to the address indicated on the form. If using a private delivery service, refer to Publication 55, Designated Private Delivery Service. The real estate tax is not imposed by five of the United States of America and those are Mississippi, Missouri, New Mexico, North Dakota, and Wyoming.

Taxpayers should be alert for variations between the county and city ordinances applicable to the subject property. Documentary stamps shall be purchased only in the county in which the property is located.

City Of Philadelphia

Contracts for the sale or exchange of real estate or any interest therein or any combination of the foregoing or any assignment or transfer thereof. The mission of our office is to work together to build a better San Francisco through superior customer service, fair property taxation and the preservation of public records. We value doing our work with the highest levels of integrity and professionalism.

Transfer taxes can be levied at the federal, state and local levels, depending on the type of property being transferred. When property is transferred from the estate of a deceased person, Inheritance tax is payable on the value of the estate including any property portfolio in that estate, subject to a minimum value threshold. Please take note of the new enhanced reporting requirements for certain residential deed transfers occurring on or after September 13, 2019, per Section 2 of Chapter 297 of the Laws of New York of 2019. 311 provides direct access to City government information, services, and real-time service updates. Transfer tax imposed by each act shall be collected unless said instrument of transfer is exempt from either or both acts and such exemptions are stated on the face of the deed.

Enhanced Documentation For Certain Residential Deed Transfers

We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. The United States had a tax on sales or transfers of stock from 1914 to 1966. This was instituted in The Revenue Act of 1914 (Act of Oct. 22, 1914 (ch. 331, 38 Stat. 745)), in the amount of 0.02% .

The Department of Finance may docket a judgment against both the grantor and grantee. Once the judgment is docketed, the Department may enforce the docketed judgment. For more information about interest and penalty rates, visit the interest, penalties, and fees page. Tailor your perspective of our site by selecting your location and language below.

  • We value doing our work with the highest levels of integrity and professionalism.
  • This update of a DLA Piper alert originally published in 2011 reports on significant new developments and suggests actions to take when planning a California real estate transaction.
  • Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate.
  • The transfer tax basis generally is the consideration paid by your child to be added to title.
  • At the county level, California has what’s known as a “documentary transfer tax” on property transfers.
  • The Department of Finance may docket a judgment against both the grantor and grantee.

Our core responsibilities include locating all taxable property in the City and County of San Francisco , identifying ownership, establishing a taxable value, and applying all legal exemptions. However, if the transfer is a gift, then there generally is no transfer tax. On the Preliminary Change of Ownership form, be sure to mark the gift box in part 2. In addition, on the Transfer Tax Affidavit, mark the Gift box in question #8 and completely fill out and sign the Transfer Tax Affidavit form.

Real Estate Transfer Tax

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Transfer Tax

This was doubled to 0.04% in 1932, in the context of the Great Depression, then eliminated in 1966. You must create the packet of RPTT forms Online using ACRIS, the Automated City Register Information System. “They can be as low as a flat rate of $2, as it is charged in Arizona, or a percentage of the sales price that can exceed 2 percent,” according to Paul Joseph, a CPA and attorney in Williamston, Michigan. “Typically, the higher the price, the higher the percentage of tax,” explains Evan Metalios, an attorney and broker/owner of RE/MAX Team in Jackson Heights, New York. Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Michigan Real Estate Transfer Tax

A Transfer Tax Affidavit must accompany all documents submitted for recordation in which transfer tax is due, or an exemption is claimed. Estate taxes are paid when the assets of a deceased party, or the estate, are transferred to their heirs. Estate taxes are levied at the federal level if the estate is valued at over $11.58 million , and also at some state levels as an inheritance tax.

Both the NYC Administrative Code and the Rules of the City of New York (ìRCNYî) permit a taxpayer to request an extension of time to file a Real Property Transfer Tax return. Extensions must be received in advance of the due date of the return, and may not be for more than 30 days. LINE 14 – Penaltiesa) If you fail to file a return when it is due, add 5% to the tax for each month or partial month the form is late up to 25%, unless the failure to pay is due to reasonable cause. You can pay the Realty Transfer Tax in person when you file the deed with the Records Department in City Hall . The Records Department only accepts cash, certified checks, or money orders for this tax.

How do I avoid transfer tax in NY?

The only way to minimize the transfer tax for sellers is through the use of a purchase CEMA, which is also known as a splitter.

This includes state or federal government-owned property transferred to a non-government entity. The RPTT must also be paid when the land and building that make up a cooperative dwelling are transferred to a cooperative housing corporation. You must pay the Real Property Transfer Tax on sales, grants, assignments, transfers or surrenders of real property in New York City. You must also pay RPTT for the sale or transfer of at least 50% of ownership in a corporation, partnership, trust, or other entity that owns/leases property and transfers of cooperative housing stock shares. Companies with real estate holdings in California should take note of this trend. Given the budget constraints faced by California’s counties and cities, the scope of transfer taxes in that state will likely expand.

Legal Authority

Absent any other exemption, the transfer tax would be due based on 100% of the fair market value of the property because the LLC is treated as a separate “person” and the proportional ownership interests will not remain the same after the completion of the transfer. No, there generally is no transfer tax if you are the sole trust beneficiary.

Transfer Tax

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Forms & Instructions

You must pay the RPTT tax and file the return within thirty days after the transfer of the property. A foreign government, a person acting on behalf of a foreign government, or the head of a foreign government’s diplomatic mission. Properties transferred under a will are also exempt, but properties purchased from an estate are not. For example, when a property is willed to multiple parties and then sold to one party, tax is due. You may be responsible for penalties up to 50% of the tax due if you misrepresent your real estate transaction or fail to record the transaction with the Records Department. The tax rate is based on the sale price or assessed value of the property, plus any assumed debt.

Transfer Tax

The tax is paid at the Registry of Deeds office in the county where the property is located. A Declaration of Consideration (Form CD-57) must be filed with the Department of Revenue Administration no later than 30 days from the recording of the deed at the Registry of Deeds or transfer of real estate, whichever is later. Real estate transfer tax can be appointed by the authorities of state, county or commune when a real estate property is being transferred within a certain jurisdiction. Subjected to the tax is usually the act of transfer of legal deeds, certificates and titles to a property that are being shifted between the seller and the buyer. The size of the tax is derived from value of the certain property, its classification and from how the property is going to be used, because the purpose of a property can often greatly affect its future value. Therefore, local and state government are permitted to collect the tax based not only on the size of a property, but also its intended purpose.


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