Who pays the transfer fees when selling a house?
Transfer fees are paid by the buyer of the property, although the conveyancing attorney who charges the fees is appointed by the seller. You can calculate what the transfer of property will cost you using our Transfer Cost Calculator.
Introduction
Real estate transfer tax is a tax that is levied on the transfer of real property from one owner to another. In New Jersey, this tax is imposed on both buyers and sellers. However, the question remains, who pays the real estate transfer tax in NJ? This article aims to provide a comprehensive answer to this question.
Who is responsible for paying the real estate transfer tax in NJ?
In New Jersey, both buyers and sellers are responsible for paying the real estate transfer tax. The tax is calculated based on the sale price of the property and is usually paid at closing. The amount of tax paid is usually split equally between the buyer and seller, although this can be negotiated in the sales contract.
What is the rate of the real estate transfer tax in NJ?
The rate of the real estate transfer tax in NJ varies depending on the sale price of the property. The tax rate is $2.00 per $500 of the sale price, or 0.4%. For example, if the sale price of a property is $300,000, the real estate transfer tax would be $1,200 ($300,000 divided by $500 = 600 x $2.00 = $1,200).
Are there any exemptions to the real estate transfer tax in NJ?
Yes, there are certain exemptions to the real estate transfer tax in NJ. These include transfers between spouses or domestic partners, transfers to a revocable trust, transfers to a corporation where the shareholders remain the same, and transfers to a partnership where the partners remain the same.
Conclusion
In conclusion, both buyers and sellers are responsible for paying the real estate transfer tax in NJ. The tax rate is based on the sale price of the property and is usually split equally between both parties. However, there are exemptions to this tax which can be beneficial for certain transfers. It is important to understand these rules and regulations when buying or selling a property in New Jersey.
FAQ
- Q: Can the real estate transfer tax be negotiated in the sales contract?
- A: Yes, the real estate transfer tax can be negotiated in the sales contract.
- Q: Are there any penalties for not paying the real estate transfer tax?
- A: Yes, there are penalties for not paying the real estate transfer tax. The penalties can include interest charges and fines.
- Q: Is there a maximum amount of real estate transfer tax that can be charged?
- A: No, there is no maximum amount of real estate transfer tax that can be charged.