Transfer tax is a tax imposed by state, county, or municipal government when real property ownership changes hands. It is essentially the government's fee for processing and recognizing the transfer of title. Transfer taxes represent one of the larger closing costs in states where they apply, and the rate structure varies significantly by jurisdiction. In some states, it is called a documentary stamp tax, transfer fee, conveyance tax, or deed tax.
In Florida, the transfer tax takes the form of documentary stamps on the deed, calculated at $0.70 per $100 of the sale price (with the exception of Miami-Dade County, which uses a rate of $0.60 per $100). On a $400,000 sale in most Florida counties, the transfer tax is $2,800. By custom, the seller typically pays the deed doc stamps in Florida. Additionally, documentary stamps on the mortgage ($0.35 per $100 of the loan amount) and intangible tax on the mortgage ($0.002 per dollar of loan amount) are paid by the buyer. In Texas, there is no state transfer tax on real property — a significant advantage for Texas transactions.
Transfer taxes are collected at closing by the title company and remitted to the appropriate government authority when the deed is recorded. The deed will not be accepted for recording without payment of the correct transfer tax amount. Incorrect calculations can result in the deed being rejected, potentially delaying closing.
Transfer taxes are itemized on the closing disclosure under "Taxes and Other Government Fees." At Beycome Title, we calculate all applicable transfer taxes precisely for every transaction and include them in your upfront closing cost estimate. Use our closing cost calculator for an accurate breakdown specific to your state, county, sale price, and loan amount. Get your free personalized quote.