Conveyancing Solicitors

Real Estate Conveyance Tax

For those of you that may not know what a conveyance tax is, it is a tax that is assessed when the title that in connected to a piece of property or real estate is transferred from one person to another. Most of the time these transactions are overseen by conveyancing solicitors, these are people that make sure that the deals are done without a problem and that both parties are being honest, therefore both parties are protected. This kind of tax is alsoknown as a transfer tax, this can either be imposed on an entity like a business or a single person. This tax is usually paid when the property is given to the buyer.

Most of the time the seller will pay the tax but sometimes the buyer will split the cost with the seller to make things easier. Sometimes a real estate agent may offer to cover some of the taxes to try and use it as an incentive to sell the property. There are different types of taxes that can be put on real estates transfers. Most of the time this is varied based on the country or state, or sometimes even cities where the property is.

A good example to this is that a municipal or state tax may be charged when certain property transfers occur. These taxes are usually implemented by the states where the property is located. Most of time the state, national, or municipal rates are the equal to set  percentage of the sale, the percentage is usually dictated by statute. It can also change based on the kind of property that is sold and the selling price of that property.

However certain laws will exempt certain types of property from these taxes. Some common tax exemptions will also include transfers that involve spouses, sales to non profit organizations, or ones that are made in reference to employee relocation. The amount of time that the property has been owned may also make a difference as to if a tax is charged at all. Some places will wave the fee if the property has been held for less than six months.

Many times the kind of property will make a difference on the tax rate. Some properties may get taxed a little bit higher. Sadly this does increase the closing cost many times for the buyer and/or the seller.

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