Definition
These are taxes imposed by state and local governments when property changes hands. Depending on location, they're called documentary stamps, excise taxes, or transfer taxes. Someone has to pay them.
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Real estate transfer taxes are a broader category encompassing all taxes charged when property changes hands. Different jurisdictions use different terms and structures, but they all serve to tax the property transfer. Understanding your jurisdiction's transfer tax is essential for budgeting and negotiating purchase price and closing cost allocation.
Pro Tip
Include all real estate transfer taxes in your total closing cost estimate. Ask your title company for a complete breakdown.
Example
Total real estate transfer taxes for a $300,000 sale might include: state transfer tax of $1,500, county excise tax of $900, and city recording fees of $75, for a total of $2,475.