One of the most variable, and often most difficult to understand, property taxes, is the transfer tax. This confusion starts with the fact that it is called something different in almost every city and state.
Some places call them a real estate transfer tax, some use document transfer fee, and some even call it a stamp tax. Many other states use a combination of all three.
Almost every state, county, and city that has a transfer tax seems to assess it differently too. Some do it based on the market value of a home, others based on size, and some just charge a one time fee.
In New Hampshire, buyers and sellers are fortunate that the real estate transfer tax (RETT) there is pretty straightforward and easy to understand.
Who Pays Transfer Taxes in New Hampshire: the Buyer or the Seller?
In New Hampshire, the buyer and the seller are both assessed $.75 per $100 in assessed value. The fee is equal for both parties and is based on the fair market value, or the purchase price agreed upon between the buyer and the seller.
Overall, this comes out to $15 per $1,000 in assessed values and applies to most transfers of residential homes. However, in some instances, such as when a home is transferred to a trust or between relatives, they could be eligible for a flat rate of $20.
The RETT is paid when stamps are purchased at the county recording office by the buyer and seller. The stamps are then affixed to the required paperwork when the deed is recorded. A local, expert real estate agent will be able to guide you through this process.
How Much Are Transfer Taxes in New Hampshire?
Since the rate is a straightforward calculation it helps to consider home the median home prices of where you are purchasing, or selling in New Hampshire.
Homes across the state have a median value of $277,000, which would come out to about $4,100 split between the buyer and the seller. However, homes in Portsmouth have a median value of $442,000, or about twice the real estate transfer tax dues. Homes way up in Pittsburg have home values around $130,000, which comes out to just under $2,000 in taxes owed.
Can You Deduct Transfer Taxes?
Real Estate Transfer Taxes (RETT) are not usually deductible from your current taxes. It is a one time fee that you pay during the home buying process and isn’t counted as a recurring tax that is deductible (like property taxes).
Since the transfer tax does add to the cost basis of your home, it can help offset any capital gains owed when you decide to sell. For example, if you owe capital gains taxes on a profit of $20,000, after the exclusion, and your registration fee totaled $2,000, your tax liability would actually be $18,000.
However, since the first $250,000 in profit from your home sale is excluded from paying capital gains, only a small number of sellers may benefit from this in New Hampshire.
Transfer taxes are typically accounted for during the closing process of your transaction. While the tax is assessed on both the seller and the buyer in New Hampshire, the cost can be negotiated during the transaction.
While this fee can add up quickly it is a one time fee and is typically accounted for in the home buying process. Additionally, New Hampshire is also known for having a high property tax rate. The average effective rate is 2.19%, which is almost double the national average.
It should be noted though that residents of New Hampshire pay no sales tax or personal income tax. However, all of these tax considerations should have been looked at closely before you decide to buy or sell in New Hampshire.
If you are looking to sell in New Hampshire, and want to know how to get top dollar for your home, start by contacting a Clever Partner Agent. Clever connects you with local, expert real estate agents from major brands and brokerages (Keller Williams, Century 21, and RE/MAX). They will guide you through the home selling process and save you money in doing so.
Buyers should also work with agents who are informed of these new changes in state law. An expert real estate agent should be able to connect you with a mortgage and title expert, who can walk you through how these changes will impact your home purchase.