How to Calculate Documentary Transfer Tax

Transfer tax is due when you buy or sell property.
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Documentary transfer tax sounds complex and off-putting. In reality, it is just a tax you pay when you transfer property or documents. When it comes to real estate, this tax is typically levied by county or local entities. Each locality sets its own tax rate. Where both city and county charge transfer taxes, you must calculate the two and add the results. You typically pay the tax at escrow closing or when you record the deed or title with the county.

Step 1

Note the price for which the property sold.

Step 2

Contact the taxing authority of any applicable government entity to obtain the transfer tax rate. Often city and county both levy a transfer tax — but not always. The city government of San Francisco, for example, has a transfer tax, but the county government of San Francisco does not (the official name of San Francisco is "the City and County of San Francisco").

Step 3

Convert the tax rate to a decimal. For example, if your county tax is $1 per $1,000, the rate is 0.001.

Step 4

Multiply the property value by the applicable tax rate(s). Continuing with the example, your home is valued at $200,000. Multiply $200,000 by 0.001 to arrive at $200 — the documentary transfer tax.

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