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?
Correct Answer
D) No, Colorado does not have a statewide real property transfer tax, but a Colorado documentary fee of $0.01 per $100 of consideration will be collected at closing.
Colorado does not impose a statewide real property transfer tax. However, Colorado does collect a documentary fee of $0.01 per $100 of consideration under C.R.S. § 39-13-102 at closing, paid to the county clerk and recorder when the deed is recorded. For a $650,000 sale, this fee would be $65. The broker's most accurate and complete response distinguishes between the absence of a transfer tax and the presence of the documentary fee.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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Previous Question
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?
Next Question
A Colorado real estate licensee is advising clients about transfer-related costs in Colorado real property transactions. Which of the following statements about Colorado transfer taxes and fees is NOT accurate?