U.S. Property Transaction Tax Guide
U.S. real estate transactions can trigger state and local taxes only when the property title is transferred. This guide focuses on state real estate transfer/conveyance taxes and any local surtaxes tied to the sale (e.g., “mansion” or housing measures). It explains key concepts, who typically pays, how rates work, and high-level differences across all states and the District of Columbia.
Table of Contents
- Overview
- What Counts as a “Property Transaction Tax”?
- Who Pays—Buyer or Seller?
- How These Taxes Are Calculated
- Exemptions & Common Carve-Outs
- Filings, Forms & Deadlines
- Foreign Sellers & FIRPTA Withholding
- State & Local: Description and Full Comparison Table (50 States + D.C.)
- Residential vs. Commercial Deals
- Structuring Tips (Non-Tax-Advice)
- Glossary
- FAQ (U.S. Real Estate Transfer Taxes)
Overview
There is no single nationwide “property transaction tax.” Instead, states and some local governments impose real estate transfer or conveyance taxes on deeded sales and certain other transfers of title. Names, rates, thresholds, filing mechanics, and exemptions differ widely by jurisdiction.
What Counts as a “Property Transaction Tax”?
This guide covers only charges triggered by a transfer of title (sale, deed conveyance, and in some places “deemed” transfers via controlling interest changes). Recording or mortgage taxes are not included unless a jurisdiction’s deed tax structure explicitly applies to sales.
Real Estate Transfer/Conveyance Taxes
A levy on the consideration/value conveyed when title changes hands; typically collected at or shortly after closing.
Documentary Stamp & Deed Taxes
In some states the tax attaches to the deed/instrument but functions as a sale transfer tax.
Local Surtaxes (e.g., “Mansion” or Housing Surtaxes)
City/county add-ons layered on top of the state transfer tax, sometimes with price thresholds or separate brackets.
Who Pays—Buyer or Seller?
Responsibility is set by statute or market custom. Parties often allocate in the purchase agreement; if silent, default rules/custom apply.
How These Taxes Are Calculated
Typically ad valorem (per $100/$1,000 or %) with possible brackets/tiers; some states differentiate residential vs. commercial or apply “mansion” thresholds.
Rate Structures
- Flat percentage or per-$1,000 rate on total consideration
- Graduated brackets with higher marginal slices
- Local surtaxes at defined price thresholds
Worked Examples
- Flat (illustrative): $2.00 per $1,000 on $750,000 → $1,500
- Tiered (illustrative): 0.5% up to $500k + 1% above; at $800,000 → $5,500
Illustrations only—always confirm current jurisdictional rules and rates.
Exemptions & Common Carve-Outs
Common carve-outs include interspousal/family transfers, mergers/reorganizations, nominal or corrective deeds, government entities, and affordable-housing provisions. Most require specific affidavits or forms at recording.
Filings, Forms & Deadlines
Taxes are collected at closing or at recording along with declarations or affidavits. Late filings can trigger penalties/interest; some recorders refuse recording until tax is paid.
Foreign Sellers & FIRPTA Withholding
FIRPTA is a federal withholding (not a transfer tax) that can affect cash at closing when purchasing from foreign sellers; separate state withholdings may apply.
State & Local: Description and Full Comparison Table (50 States + D.C.)
High-level snapshot of whether a state-level tax applies to deeded sales and where notable local add-ons exist. If a state has no state transfer tax, that is noted explicitly.
| State / D.C. | State & Local Transfer-Tax Landscape (sale/transfer of real property) |
|---|---|
| Alabama | State deed/transfer tax applies statewide; counties record and may add modest fees. |
| Alaska | No state real estate transfer tax; most localities do not impose a deed transfer tax. |
| Arizona | No state transfer tax on deeded sales; recording fees only; local RETTs uncommon. |
| Arkansas | State real property transfer tax applies statewide. |
| California | County documentary transfer tax plus numerous city add-ons (often tiered) on sales. |
| Colorado | No statewide transfer tax; some home-rule/local jurisdictions levy local transfer taxes; a small statewide documentary fee exists but is not a percentage transfer tax. |
| Connecticut | State real estate conveyance tax plus municipal add-on; some higher-value tiers apply locally. |
| Delaware | State realty transfer tax with a local share; combined burden typically split between state and locality. |
| District of Columbia | Deed transfer tax and deed recordation tax on sales, with bracketed rates. |
| Florida | State documentary stamp tax on deeds functions as a sale transfer tax; counties administer; local surtaxes generally limited. |
| Georgia | State real estate transfer tax on consideration; locals may add fees but not separate percentage surtaxes. |
| Hawaii | State conveyance tax with tiered rates; limited county-level targeting may apply. |
| Idaho | No state transfer tax; recording fees only; no typical local transfer tax. |
| Illinois | State real estate transfer tax; many municipalities (e.g., Chicago) impose additional city transfer taxes. |
| Indiana | No state transfer tax; recording fees only; locals generally do not impose deed transfer taxes. |
| Iowa | State real estate transfer tax; counties administer; local surtaxes uncommon. |
| Kansas | No state transfer tax; recording fees only; locals generally do not impose deed transfer taxes. |
| Kentucky | State real estate transfer tax assessed on consideration; locals typically no separate transfer surtax. |
| Louisiana | No state transfer tax; recording fees; locals generally none. |
| Maine | State real estate transfer tax; payment often shared by custom. |
| Maryland | State transfer tax plus county-level transfer/recordation components in many jurisdictions. |
| Massachusetts | State deeds excise on conveyances; certain municipalities authorized for local housing or “mansion” surcharges. |
| Michigan | Both state and county real estate transfer taxes apply to sales. |
| Minnesota | State deed tax on transfers; select local deed/transfer taxes exist. |
| Mississippi | No state transfer tax; recording fees only. |
| Missouri | No state transfer tax; recording fees only. |
| Montana | No state transfer tax; recording fees only. |
| Nebraska | State documentary stamp tax on sales; counties administer; local surtaxes uncommon. |
| Nevada | State real property transfer tax with county components; combined rate varies by county. |
| New Hampshire | State real estate transfer tax imposed on both parties by statute; local surtaxes generally not separate. |
| New Jersey | State realty transfer fee with statutory brackets and certain supplemental amounts; counties record. |
| New Mexico | No state transfer tax; recording fees only. |
| New York | State real estate transfer tax and state “mansion” tax on high-value residential; New York City and some localities impose their own transfer taxes. |
| North Carolina | State excise tax on conveyances; a few voter-approved local land transfer taxes exist in limited jurisdictions. |
| North Dakota | No state transfer tax; recording fees only. |
| Ohio | State-authorized real property conveyance fee collected at county level; some counties add an additional permissive amount. |
| Oklahoma | State documentary stamp tax on deeds acts as a transfer tax; locals typically no surtax. |
| Oregon | No state transfer tax; local transfer taxes generally prohibited statewide; one narrow local exception exists (Washington County). |
| Pennsylvania | State realty transfer tax plus local shares (municipal and school district); combined rate varies by locality. |
| Rhode Island | State real estate conveyance tax with price-tier adjustments; limited local surcharges may apply. |
| South Carolina | State deed recording/transfer tax shared with counties; no separate percentage local surtax beyond the shared component. |
| South Dakota | State real estate transfer tax with a nominal statewide rate; locals typically no surtax. |
| Tennessee | State real estate transfer tax on consideration; locals do not levy separate percentage transfer taxes. |
| Texas | No state transfer tax; recording fees only; local transfer taxes not imposed. |
| Utah | No state transfer tax; recording fees only. |
| Vermont | State property transfer tax with brackets and special rules; locals generally no add-on. |
| Virginia | State grantor’s tax (transfer) plus a local add-on in some jurisdictions; combined burden varies. |
| Washington | State Real Estate Excise Tax (REET) with graduated brackets plus local REET layered by cities/counties. |
| West Virginia | State excise tax on property transfers; counties may add a local excise component. |
| Wisconsin | State real estate transfer fee; counties record and remit; locals do not levy separate percentage transfer taxes. |
| Wyoming | No state transfer tax; recording fees only. |
Residential vs. Commercial Deals
Commercial transfers may trigger different brackets or local measures, and some states treat transfers of controlling interests in real-estate-owning entities as “deemed” real estate transfers. Residential transactions more often face “mansion” thresholds or homestead-related relief.
Structuring Tips (Non-Tax-Advice)
- Specify who pays transfer taxes in the purchase agreement.
- Identify potential exemptions early (intra-group, corrective deeds, government, affordable housing).
- Model tiered state and local add-ons near thresholds to avoid surprises.
- For portfolio/entity deals, confirm any controlling-interest rules that may deem a transfer taxable.
Glossary
Ad valorem: Based on value.
Conveyance/transfer tax: Levy triggered by a deeded sale/transfer of title.
Mansion tax: Extra tax above price thresholds, imposed by states or localities as a surtax on transfers.
FAQ (U.S. Real Estate Transfer Taxes)
ℹ️ Click a question to reveal the answer:
Is there a federal real estate transfer tax in the U.S.?
No. Transfer taxes are imposed by states and, in some cases, cities/counties. There is no general federal transfer tax on deeded sales.
Which states have no state-level transfer tax on real estate sales?
Alaska, Arizona, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon (local transfer taxes generally prohibited), Texas, Utah, and Wyoming. Always verify any local rules before closing.
Do local governments add their own transfer taxes?
Yes, in many states (for example, certain cities in California, New York City, and various jurisdictions in Washington). Combined liability can vary by locality.
Who typically pays the transfer tax—buyer or seller?
It depends on statute and local custom. Parties often allocate by contract; if silent, default rules/custom control.
Are “mansion” taxes the same as transfer taxes?
They are a type of transfer surtax triggered above price thresholds (state or local). They apply in addition to any base transfer tax.
Do mortgage recording or intangibles taxes count here?
No. This guide covers only taxes triggered by the sale/transfer of real property. Mortgage/recording taxes are separate and may apply in addition to transfer taxes.
How are transfer taxes calculated?
Typically ad valorem (per $100/$1,000 or %) on consideration. Many states use brackets with higher marginal rates for high-value transfers.
Are entity interest transfers ever taxed like deed transfers?
Some states treat transfers of controlling interests in entities owning real estate as taxable “deemed” real estate transfers. Rules vary by jurisdiction.
Where can I confirm the current rate for a given property?
Consult the relevant state revenue or treasury agency and the city/county government for any local surtaxes. Your closing or escrow agent can also provide current forms and affidavits.
Are rates fixed or do they change over time?
They change—often through state legislation or local measures. Always verify the latest rules before closing.
Do transfer taxes apply to gifts or inheritance transfers?
Many jurisdictions exempt certain non-sale transfers (e.g., gifts, estate distributions), but documentation and specific affidavits are usually required.
Does FIRPTA change how much transfer tax I owe?
No. FIRPTA is federal withholding and is separate from state/local transfer taxes, though it affects cash flow at closing.