![]() ![]() And the amount is usually based on a percentage of the sale price or the property’s assessed value at the time of the sale. State and local governments levy real estate excise taxes or transfer taxes. “To correctly plan for the cost of the transaction, buyers and sellers must be informed of their local excise tax rules.” How much is an excise tax? “Depending on the jurisdiction, the tax is sometimes the buyer’s responsibility to pay, and other times it’s the seller’s,” says Sarah Sharp, an acquisition attorney and partner at SK&S Law Group and the director of Acta Consulting LLC, a tax advisory service in Denver. While the transfer fee varies from state to state, it is typically the responsibility of the seller to cover the amount of the tax. In certain areas, real estate excise taxes can also be referred to as a real estate transfer tax, a conveyance fee, a recordation tax, a documentary transfer tax, or a deed transfer tax. ![]() The tax has different names, depending on the jurisdiction where you’re recording a sale. What is an excise tax in real estate?Ī real estate excise tax (REET) is a tax on the sale of real property. So let’s explore what exactly a real estate excise tax is-and who’s on the hook for it. ![]() You might be scratching your head, wondering what this is. ![]()
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