To calculate: divide the sale price by the applicable denomination (e.g., $500) and multiply by the tax rate per unit. Some jurisdictions round up to the next whole unit. Common exemptions include transfers between spouses, transfers due to death, or government acquisitions. The seller traditionally pays the transfer tax.
A property sells for $350,000 with a transfer tax of $1.50 per $500 of sale price. $350,000 / $500 = 700 units. 700 x $1.50 = $1,050 in transfer tax.
Read the question carefully to determine whether the rate is per $100, per $500, or per $1,000. Some questions ask you to work backward from the tax amount to find the sale price—divide the tax paid by the rate per unit, then multiply by the denomination. Remember that rounding rules vary.
Related Terms
Related Concepts
Converting a percentage to a decimal involves dividing the percentage value by 100.
IRV stands for Income, Rate, and Value. It represents the relationship between Net Operating Income (I), Capitalization Rate (R), and Property Value (V).
Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
The gross rent multiplier (GRM) is a quick method for estimating the value of income-producing property by multiplying the property's gross rent by a factor derived from comparable sales. GRM = Sale Price / Gross Rent.
The capitalization rate (cap rate) is the ratio of a property's net operating income to its sale price, expressed as a percentage. It is used to estimate value and compare profitability of investment properties. Cap Rate = NOI / Value.
Frequently Asked Questions
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