What Is Transfer Tax?
Transfer Tax: A state or local tax charged when real estate changes hands.
A transfer tax is charged by some states, counties and cities when a property's deed is transferred from seller to buyer. It's usually a percentage of the sale price or a fixed amount per $500 or $1,000.
Who pays
It depends on the state and local custom, and the purchase agreement can change it. In some places the seller pays; in others, the buyer, or they split it. A few states charge no transfer tax at all.
Where it shows up
Transfer taxes appear in the government fees section of your Loan Estimate and Closing Disclosure, next to recording fees.
Good to know
Some states offer reduced transfer taxes for first-time buyers. Ask your escrow or title company.