North Carolina’s transfer tax rates are straightforward — expect to pay $1 for every $500 of the sale price. For the state’s average home value of $320,291, the transfer tax would amount to $640.58.
Certain counties charge an additional land transfer tax of 1% of the sale price, which would be an additional $3,292 for the average home.
They typically charge this fee to the seller, but they can negotiate with buyers to shoulder some or all of the transfer tax dues.
Partnering with a Clever Real Estate agent can help mitigate this financial blow. Our agents are expert negotiators who can tip the tax burden in your favor. What’s more, their 1.5% listing commission rate is lower than the average 3%, which will help you save even more in the long run.
Who pays transfer taxes in North Carolina: The buyer or the seller?
In North Carolina, it's very typical that the seller will pay the transfer tax during the sale of a property. Transfer taxes can be imposed by the city, county, or state (or all three). They are most commonly used for funding public services, just as most taxes are. However, if the buyer and seller are up for negotiating terms during the selling and buying process, you can ask that the buyer pays a portion or all of the transfer tax.
How much are transfer taxes in North Carolina?
When ownership in North Carolina real estate is transferred, an excise tax of $1 per $500 is levied on the value of the property. For example, a $600 transfer tax would be imposed on the sale of a $300,000 home.
Transfer taxes in North Carolina are typically paid by the seller. Seven counties in North Carolina are authorized to impose an additional land transfer tax of up to 1% of the sale price. Only seven counties in North Carolina levy a local excise tax on the transfer of real estate. They are:
Transfer taxes are non-negotiable, however, you can save enough money to offset the cost by using a Clever partner agent.
By using a Clever agent, you pay a listing fee of 1.5%, which is a much lower rate than the nationwide average of 3%. Your savings will cover the transfer tax fees, and you’ll also get to take home a larger cut of the sales profit post-taxes.
North Carolina transfer tax exemptions
There are circumstances where there is no transfer tax needed. Some of these are deeds of gift, foreclosure deeds, deeds from local, state, or federal government, and certain leases with a term of fewer than 10 years.
Can you deduct transfer taxes?
We are all typically looking for ways to make tax deductions. While there are many things homeowners can do to maximize their tax deductions, such as utilizing property taxes, transfer taxes is not one of them. This is because the IRS does not consider transfer taxes as a “sales tax.”
However, as a seller, you can include the transfer tax on the cost basis of your property. The way this works is when you sell your house, the goal is to walk away with a profit. This profit is going to be taxed by a capital gains tax. The amount you spent on the transfer tax can be taken from your profit so that your capital gains tax bill can be reduced.
The good news is that you won't even need to make this reduction if you owned the home for more than two years. A married couple who lived in the house for two of the last five years could exclude $500,000 of capital gains.
North Carolina transfer tax summary
Although you now know the basics of North Carolina transfer taxes, there can still be situations that can complicate your sale. For example, if you're selling a house within the seven counties that have additional transfer taxes, things can get confusing.
Having a professional to guide you will make the sale easier to deal with — and doing so might even help you cut on some overhead costs.
Clever Partner Agents in North Carolina can help you take home the biggest potential profit while minimizing the taxes you have to pay. Our agents come from big-name brokerages like Century 21 or Keller Williams and can provide invaluable help throughout your real estate transaction.
» SAVE: Learn more about how a Clever agent can help you navigate North Carolina transfer taxes