Learn personal and professional finance terms to keep you in the know
A transfer tax is a government-imposed fee charged when real estate ownership is transferred from one party to another, typically calculated as a percentage of the sale price. It can be levied at the state, county, or municipal level, and the rules regarding whether the buyer or the seller pays vary by location. In some regions, transfer taxes are split evenly between both parties; in others, it's customary for one party to bear the full cost. Typically paid at closing, these taxes can represent a substantial expense depending on the home's price and local tax rates. Understanding your local transfer tax rules ahead of time helps you budget accurately for the true cost of buying or selling a home.
