James is selling his home in Snowmass Village, Colorado for $1,200,000. The Town of Snowmass Village imposes a real estate transfer tax of 1% on the sale price, paid by the buyer. In addition, Colorado charges a documentary fee of $0.01 per $100 of consideration (rounded to the nearest dollar) on all real property transfers, which is collected at closing. What is the combined total of the Snowmass Village transfer tax and the Colorado documentary fee that will be collected at closing for this transaction?
Correct Answer
A) $12,120
Step 1 — Snowmass Village Transfer Tax: Sale price × 1% = $1,200,000 × 0.01 = $12,000. Step 2 — Colorado Documentary Fee: $0.01 per $100 of consideration = $1,200,000 ÷ 100 × $0.01 = 12,000 × $0.01 = $120. Step 3 — Combined Total: $12,000 + $120 = $12,120. Colorado imposes a documentary fee (sometimes called a filing fee) of $0.01 per $100 of consideration under C.R.S. § 39-13-102, collected at closing and paid to the county clerk and recorder. This is separate from any local transfer tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
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Previous Question
Maria is purchasing a condominium in Telluride, Colorado for $850,000. Her real estate broker informs her that a transfer tax will apply to the transaction. Which of the following statements correctly explains the source of this transfer tax obligation?
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A buyer's broker in Denver is preparing a buyer for closing on a $650,000 residential property. The buyer asks whether she will owe any Colorado state transfer tax at closing. Which of the following is the most accurate response the broker should give?