A Colorado broker is advising a seller client about closing costs. The seller asks whether Colorado has a state-level real estate transfer tax similar to the transfer taxes imposed by states like New York or California. Which response is most accurate?
Correct Answer
B) Colorado does not have a state-level real estate transfer tax; it has only a nominal documentary fee of $0.01 per $100 of consideration
Colorado does not impose a traditional state-level real estate transfer tax. Instead, C.R.S. § 39-13-102 establishes a nominal documentary fee of $0.01 per $100 of consideration, which is primarily a revenue measure for funding title plant and recording systems. This is substantially lower than the transfer taxes imposed by states like New York (up to 1.4%) or California (0.11% state + local rates). Colorado is considered a low-transfer-tax state.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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