What Is a Conveyance Tax?

Conveyance tax is imposed on the transfer of real property at the state, county, or municipal level. The conveyance tax is also known as a real estate transfer tax. This tax is generally calculated as a percentage of the sale price. If the property is sold for a very low amount or is transferred for free, such as between family members, it may be exempt from conveyance tax but may still be subject to 澳洲幸运5官方开奖结果体彩网:estate tax.

When Conveyance Tax Applies

In some jurisdictions, the conveyance tax increases as the property's sale price increases. In other jurisdictions, it is a flat rate. The conveyance tax rate may also depend on the type of property, such as residential, nonresidential, or unimproved land. While state and municipal conveyance taxes are common, there are no applicable federal conveyance taxes. As of 2024, these states that do not incur this tax:

• Alaska
• Idaho
• Indiana
• Kansas
• Louisiana
• Mississippi
• Missouri
• Montana
• New Mexico
• North Dakota
• Texas
• Utah
• Wyoming

Conveyance tax rates often consist of a flat percentage rate. Colorado levies a 0.01% 澳洲幸运5官方开奖结果体彩网:transfer tax on all real estate sales, while Arkansas and New Hampshire levies a 0.33% and 1.5% rate, respectively in 2024. Conveyance tax can also be a flat fee, such as in the state of Arizona. The state collects a $2 transfer tax regardless of the property's value.

Properties in New York City and New York State are levied on a progressive or tiered system based on the property’s price. Homes above $1 million are subject to a "mansion tax."

Multiple Real Estate Transfer Taxes

Conveyance tax rates may vary based on the type of property sold or whether a deed or a mortgage exchanges hands. Even if state transfer tax is not charged, it may be required at th♔e county and city level. In some areas, sellers face state, county, and muni🌟cipal conveyance taxes.

As of 2024, sellers in Chicago must pay up to 0.45% conveyance tax to Illinois. An additional $5.25 per $500.00 of the transfer price of the real property is imposed, with the buyer responsible for $3.75 and the seller responsible for $1.50.

The Bottom Line

A real estate transfer tax or conveyance tax is levied by the government when the ownership or title of real estate changes. The tax varies by state, county, and locality, and there are no federal guidelines for real estate transfer tax.