What is a real property transfer tax?

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A real property transfer tax is a tax imposed on the transfer of ownership of real estate from one entity to another. This tax is usually calculated based on the sale price or value of the property being transferred. It is the responsibility of the seller or buyer, depending on local laws, and is often collected at the time the deed is recorded in the local land records office.

This tax serves to generate revenue for state and local governments and can vary significantly depending on the jurisdiction. It is distinct from property taxes, which are levied annually based on property ownership, and it does not entail inspections or relate specifically to commercial properties. The real property transfer tax applies universally to both residential and commercial transactions, reinforcing its role in property ownership changes.

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