Who pays transfer taxes? | When are transfer taxes paid? | Methodology
Georgia's current transfer tax rate is $0.10 per $100. So, for a house worth $321,821 — the median home price in the state — the transfer tax due will be $322. It doesn’t stop there, however, as cities within the state may charge an additional fee on top of the standard rate, which can cause your total dues to increase.
The specifics on who pays the transfer tax in Georgia are sometimes up for negotiation, but usually the seller is responsible.
Additionally, these taxes and other associated fees can vary on a state, regional, and local level. Therefore, it's critical for both buyers and sellers to work with an experienced real estate agent to ensure they understand the process thoroughly before selling or purchasing property.
To make sure you're as prepared as possible, here's the basic information you need to know about transfer taxes in Georgia.
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Who pays transfer taxes in Georgia: The buyer or the seller?
In Georgia, usually, the seller is responsible for paying the transfer tax.
That being said, you can't assume that just because you're a buyer you're off the hook. While in most cases the seller will pay the transfer tax, it's not law. Everything that has to do with who pays what is taken care of during the negotiation phase.
For this reason, you can't know who's really responsible for the transfer tax until the negotiations are over. There are certain situations in which a seller might ask a buyer to pay the taxes. Be sure to work closely with your real estate agent to ensure negotiations are as fair and beneficial to you as possible.
How much are transfer taxes in Georgia?
The current tax rate is $0.10 per $100 or 0.10% of the home sale value. So, for the median home price of $321,821, the property transfer tax will be $322.
There might be other federal and local taxes that you'll have to consider, as well. There are all kinds of transfer taxes at the federal level that are broken down into incredibly specific segments. For instance, there are unique transfer taxes for transfers that happen after a death, gift taxes on transfers made while someone is still living, and even a tax on property that skips a generation.
Because there are so many nuanced laws and regulations, it's important to work closely with a real estate agent who has experience in the local market. They will have a solid grasp on the taxes and fees that apply from the federal all the way down to the county level and can help you plan for any fees you'll have to pay.
We’ll partner you with a local real estate agent who knows how to deal with the state’s tax and helps negotiate a deal in your favor. What’s more, our agents charge only a 1.5% listing fee compared to the national average of 2.83%! The money you'll save can more than offset the cost of the transfer taxes.
Can You Deduct Transfer Taxes?
The short answer is: usually not. However, you can wrap the amount of the transfer tax into the cost basis of your property. The cost basis is basically a sum of everything you paid to acquire the property. While this doesn't do you much good as a buyer, it does help when you sell the property because it adds to the cost basis, which effectively reduces the amount of capital gains tax you'll have to pay in the long run.
Methodology
- Transfer tax amounts are based on government website information as of February 2024.
- We gathered our listing commission rate data from a December 2023 survey of 630 of our partner agents.
- Home values, list prices, and sale prices are based on Zillow data as of February 2024.
Other Considerations
Typically, real estate transfer taxes are paid at closing. If your sale is residential in nature, the tax amount will be included on the HUD-1 settlement form associated with the transfer. Buyers also have to consider additional fees and taxes when calculating the potential cost of homeownership, even if they don't have to pay the transfer tax. Sellers also have to consider the potential fees and taxes that they'll be responsible for, as well.
It's easy to see how nuanced these transactions can become. That's why you should consult with a local real estate agent who has experience in your market. Clever Partner Agents work for a fraction of the typical commission rate, which is a cost savings opportunity for both buyers and sellers.
Contact Clever today for a no-obligation consultation with a top-rated Partner Agent in your area.
