massachusetts real estate transfer tax

If you’re in the process of buying or selling a house in Massachusetts, you may have concerns about tax obligations such as the Massachusetts real estate transfer tax.

Real estate transfer tax rates vary from state to state and are imposed by your county. The tax is based on the assessed value of the property being purchased and it is usually calculated as a percentage of the sale price. That being said, here is some additional information about the Massachusetts real estate transfer tax and how to navigate it when buying or selling a home.

Who Pays It: Buyer or Seller?

The home seller will typically pay the transfer tax when they transfer the property’s deeds, certificates, and titles to the property that is being sold. 

While the responsibility to pay the real estate transfer tax falls on the seller in Massachusetts, it’s a matter that can be negotiated by both parties. The buyer and seller can arrange how will be paid and whether or not both parties contribute to the tax.

Are Transfer Taxes Deductible?

While Massachusetts real estate transfer taxes are not tax deductible for the seller or buyer, there are some other ways both parties can save money.

Transfer taxes are considered in the cost basis of the property, which is used to calculate the final capital gain on the sale. Raising the cost basis brings down the total gain on the sale. As a result, you’ll pay less in total taxes than you pay on the gain.

How Much Are Transfer Taxes in Massachusetts?

The amount sellers will need to pay for real estate transfer taxes in Massachusetts depends on what the property is sold for and its location. The typical transfer tax rate in Massachusetts is $2.28 per $500 of property value, but this number is subject to change.

Your Guides For Real Estate Law

Tax laws can be tricky to navigate in Massachusetts, and when you’re selling or buying a home you need to know what to expect. At DaMore Law, we’ll help you calculate the real estate transfer tax payments on your property. We’re here to help you throughout any challenges you may face during the home buying and selling process. Visit our website to get in touch with a real estate law professional.