Transfer Taxes Can Be Significant
By Ilyce R. Glink
Summary: A writer is hit with a significant transfer taxes at closing time. Illyce explains how transfer taxes are assessed.
Q: Recently we sold our family home in Sonoma County, California. Itemized on our "Final Settlement Statement" from the title company were seller charges of $899.80 for "County Documentary Transfer Tax to First American Title Company." What do such significant charges to the seller represent?
A: You should ask the lender or title company, but nearly every county, state and local municipality raises money via "transfer taxes." These are stamps that sellers a required to purchase that must be affixed to the deed in order for the transaction to close.
These transfer taxes are based on the sales price of your home, and there are various ways for a county to calculate the tax. Some charge $5 per $1,000 of sales price, others charge as little as 25 cents per $1,000 of sales price. Other counties or states charge a fixed fee.
The transfer taxes are public record, and you could certainly check out whether you were charged correctly or not. You could also call the title company and ask them to explain the charge. Finally, take a look at your truth-in-lending statement. The charges should have been detailed there as well.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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