The Real Estate Encyclopedia
How Is The Transfer Tax Computed?
Category - Home Selling Questions - Selling Legal & Closing FAQ's

In many states, a transfer tax is charged when title is transferred from one party to another.  The tax is paid to the clerk of the superior court in the county where the property is located.  The tax is paid when the deed is recorded.  If a loan is being assumed, the transfer tax may not be charged on the entire purchase price but if the transaction involves a new loan, the transfer tax applies to the entire purchase price.  The transfer tax is computed by dividing the sales price into 100 to obtain the number of 100-dollar increments.  The resulting number is then multiplied by $.10.  If the resulting amount contains a fraction, the amount is increased to the next higher whole number.  For example, if the sales price is $62,950, 62,950: 100 = 629.5.  Carried to the higher whole number = 630 (x) .10 = $63.00.  Thus, the transfer tax will be $63.00. 

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