Who Pays Tax Stamps in Massachusetts

The Commonwealth of Massachusetts generates revenue from the sale of real estate through the sale of state excise tax stamps. They are typically $4.56 per $1,000 of the sale price, although there are a few Massachusetts counties that charge more. Barnstable County, for example, has been charging $6.12 per $1,000 since July 1, 2009. Dukes (Martha`s Vineyard) and Nantucket also charge an additional 2% land bank fee. If you`re thinking about selling or buying a home, you may be wondering what my tax obligations will be. Here`s our comprehensive guide to Massachusetts land transfer taxes, how much they`re going to, and how you can negotiate who pays them. Massachusetts real estate tax stamps are mandatory payments. The cost of the tax must be included in the total cost of the property purchased. Since it is negotiable, both the buyer and seller should familiarize themselves with it. The price of tax stamps varies by state, region and county.

In Massachusetts, it costs an average of $4.56 per $1000 of the sale price. For example, if you sell your home for $500,000, the transfer tax will be $2,280. However, there are some counties like Cape Cod areas that have a different price like Barnstable County, which charges $6.12 per $1000. If you set aside a budget for selling your home, you should talk to your real estate agent to make sure you have all the necessary information. In Massachusetts, the Department of Revenue collects the tax, and stamps on a deed are proof of payment. The payment of the tax is indicated by excise duty stamps affixed to the deed of transfer or deed in the register of deeds of the municipality where the property is located. The stamp must be purchased in the same document register. If the transfer is real estate located in more than one jurisdiction, only one deed is used to register the transfer, and the purchase price is not allocated based on the county, you must purchase stamps in the jurisdiction of the first admission. In other jurisdictions where a duplicate of the document is filed, the document must indicate that it is a duplicate of an original of a registered document on which excise duty stamps have been affixed. In the state of Massachusetts, tax stamps are mandatory fees charged by the Treasury Department. The responsibility for paying the tax ultimately rests with the Massachusetts seller. However, as everything is to be negotiated, it is important that the buyer and seller become familiar with the real estate transfer taxes.

When real estate is transferred to MA, land transfer taxes (sometimes called deed registration taxes) are levied. Unlike the annual property tax, real estate transfer taxes are collected only once at closing. It is important that home buyers and sellers are aware of the real estate transfer taxes and costs that can affect the money needed to close. Below you will find information about MA real estate transfer tax and who pays it. I have trouble finding official information (para. B of mass.gov) on this stamp duty. I`m buying a house, so I`m interested in whether the seller is still paying the land transfer tax or if they might try to throw it away at the buyer. The objective of this Directive is to specify where excise stamps are to be purchased in order to ensure that revenue from excise duties is allocated to the appropriate country. This policy will promote more effective oversight of excise duties by the Department. For example, a home sold for $400,000 in most counties would result in the seller paying tax stamps $1,824 ($400 x $4.56 = $1,824). Tax stamps are paid in the register of deeds in the district where the property is located, and the deed cannot be registered until the register has confirmed receipt of payment for the tax stamp. Sellers can find the amount of real estate transfer tax on their closing disclosure.

The amount of tax levied is based on the applicable rate when a financial statement is completed and the deed is registered. Tax rates on real estate transfers change from time to time. Proposed increases often meet with resistance. Ask a real estate professional for applicable information about tax rates. You should also check with your tax advisor to see if real estate transfer tax is deductible from your federal and/or local tax return. The information about MA real estate transfer tax and who pays it, as stated above, is only general information. Contact Peter DaMore of Peter T. DaMore Jr.

Law Firm by calling 781-229-7900 or emailing pdamore@ptdlaw.com if you have any questions. Many home sellers don`t realize that they also have to pay real estate transfer taxes when they sell their home. Most states have some sort of property transfer tax. It is sometimes called “stamp duty” because years ago, an embossed stamp had to be affixed to the document to show that the tax had been paid. Adhesive stamps are now used on the document. Other names for this tax are document stamps, excise duties, document stamps and transfer duties. Transfer taxes are levied by counties, local authorities, and states on real estate transactions and vary from state to state. A home seller usually (but not always) pays real estate transfer tax when transferring legal deeds, certificates, and titles to the property being sold. In Massachusetts, they can also be called deed stamps or excise tax.

If you have any further questions about tax stamps, closing costs or real estate in general, feel free to comment below or contact us directly! We are never too busy to answer your questions! If you`ve never sold a home in Massachusetts, you may not even know it exists. This tax on the sale of a home is known as Massachusetts tax stamps. In most parts of Massachusetts, the tax stamp is equivalent to $4.56 per thousand dollars of the sale price of the home. Every community in Massachusetts levies a property tax on residential properties within its borders, and it is often a major revenue producer in that community. The local advisory board sets the tax rate. Some homeowners will be surprised that when they sell their home, they have to pay a tax on the sale of the property. This tax may be called transfer tax, document stamp, stamp duty, transfer tax or excise duty. It is paid at closing and the final lawyer is responsible for ensuring that all property taxes have been paid and properly distributed. Lenders may require an escrow account to pay these taxes.

Pulgini & Norton`s real estate lawyers in Boston are familiar with the tax issues surrounding real estate transactions and can help you comply with applicable regulations. For example, if you sell your home for $400,000, you owe the state of Massachusetts $1824.00 ($4.56 x 400). The money paid for tax stamps is income that is donated to the appropriate registry and forwarded to the Massachusetts Commonwealth Department of Revenue. .