Real Estate Transfer Tax Calculator

A real estate transfer tax (also called deed transfer tax or documentary stamp tax) is a fee imposed by state, county, or local governments when property ownership transfers from one party to another. The tax is typically calculated as a percentage of the sale price or property value, ranging from 0.01% to over 2% depending on location. Some states have no transfer tax, while others like New York and California can have combined rates exceeding 2%.

Who pays transfer tax varies by location and is often negotiable. Traditionally, sellers pay in most states, but in some areas like New York City, buyers pay. In many jurisdictions, the cost is split between buyer and seller. Local customs, market conditions, and contract negotiations determine final responsibility. Always check local practices and include transfer tax payment terms in your purchase agreement.

States and cities with the highest transfer taxes include: Delaware (3-4% combined), Washington DC (2.2-2.9% for buyers, 1.1-1.45% for sellers), New York (up to 2.075% state/city combined, plus mansion tax), Pennsylvania (2% in some counties), and Vermont (1.25-1.45%). Major cities like San Francisco, Chicago, and Pittsburgh add additional local transfer taxes on top of state rates.

Common transfer tax exemptions include: transfers between spouses due to divorce, transfers to/from trusts where the beneficiary is the grantor, gifts without consideration, transfers due to bankruptcy, certain first-time homebuyer programs, transfers to government entities, and inherited property (though estate taxes may apply). Exemption requirements vary by state. Some areas offer reduced rates for primary residences or properties under certain values.

Transfer tax is a percentage-based tax on the property value (e.g., 1% of $500,000 = $5,000), while recording fees are flat charges for filing deeds and documents with the county recorder's office (typically $50-$500). Both are closing costs, but recording fees only cover administrative costs of recording the transaction, whereas transfer taxes are revenue for state/local governments. You'll pay both when buying or selling property.

Transfer tax is calculated on the property's sale price or market value, not the mortgage amount. For example, if you buy a $400,000 home with a $320,000 mortgage, transfer tax applies to the full $400,000 sale price. Some jurisdictions also charge separate mortgage recording taxes (0.25-2.8% of loan amount), which are additional fees distinct from the property transfer tax.

A mansion tax is an additional transfer tax on high-value properties, typically starting at $1 million. New York City charges 1% on properties $1M+ and up to 3.9% on properties $25M+. New Jersey's mansion tax is 1% on homes over $1M. Los Angeles charges up to 5.5% on properties over $5M. These progressive taxes generate revenue from luxury real estate transactions and are always paid by the buyer unless negotiated otherwise.

No, transfer taxes and recording fees cannot be financed into your mortgage—they must be paid in cash at closing. These are considered closing costs separate from your down payment and loan amount. However, you may be able to negotiate with the seller to cover these costs through seller concessions, effectively rolling them into the purchase price (and thus your mortgage), but they still must be paid separately at closing.

Transfer taxes paid when buying property are not deductible as an itemized deduction on your federal income tax return. However, they are added to your property's cost basis, which reduces capital gains tax when you sell. For sellers, transfer taxes are deducted from proceeds and effectively reduce capital gains. If you use the property as a rental, transfer taxes become part of your depreciable basis.

Transfer tax must be paid before the deed can be recorded. Without recording, you don't have legal proof of ownership, can't obtain title insurance, and face challenges selling or refinancing later. The county recorder's office won't accept deed filing without proof of transfer tax payment. Penalties for late payment include interest (typically 10-18% annually), fines, and potential liens on the property.

Refinancing your mortgage typically does not require transfer tax because ownership isn't changing—you're simply replacing one loan with another. However, you may owe mortgage recording tax (0.25-2.8% in some states) on the new loan amount. If you refinance and add a co-borrower who receives ownership interest, transfer tax may apply. Cash-out refinances generally don't trigger transfer tax either.

Transfer taxes apply equally to FSBO and agent-assisted sales—they're based on sale price, not transaction type. In FSBO sales, buyers and sellers must arrange transfer tax payment themselves, typically through their closing attorney or title company. The title company calculates the tax, collects payment at closing, and remits it to the appropriate government agency. Failure to properly handle transfer tax can delay or invalidate the sale.