How to avoid paying Transfer Tax at closing...

With the decline in real estate prices in recent years, a little known exemption relative to State transfer tax has come into play for some sellers. It hasn't been very common for a lot of the properties we sell because values have not declined as much Up North as they have in other areas. Also, it's an exemption for properties that are principle residences. If you qualify, however, it can be a great way to save some money when selling a home which has declined in value since the purchase. Here are the basic requirements:

1. The property must have been occupied as a principle residence – classified as homestead property.

2. The property’s SEV for the calendar year in which the transfer is made must be less than or equal to the property’s SEV for the calendar year in which the seller acquired the property.

3. The property cannot be transferred for consideration exceeding its “true cash value” for the year of the transfer.

Click Here for a great worksheet I found that can help you determine whether or not you qualify. As with any situation relative to taxation, consult with your tax professional to determine if you have the right to take advantage of this exemption. The penalty if you claim it unlawfully is 20%!! Good luck in your sale and I hope we saved you a few bucks!!