A Colorado licensee is representing a buyer purchasing a $900,000 single-family home in a Colorado mountain municipality that imposes a 1% local transfer tax. The seller's listing agent insists that the seller is entitled to a credit for half the transfer tax because 'Colorado law requires equal splitting of all transfer taxes.' The buyer's licensee suspects this is incorrect. Which of the following best describes the correct legal and contractual position?

Correct Answer

D) The listing agent is incorrect; there is no Colorado statute or CREC regulation requiring an equal split of local transfer taxes, and allocation is determined by contract terms and local custom, which typically places the obligation on the buyer.

No Colorado statute — including C.R.S. § 39-13-102 (which addresses the documentary fee, not local transfer taxes) — requires an equal split of local real estate transfer taxes. CREC regulations likewise do not mandate a 50/50 allocation. Transfer tax responsibility is a negotiable term governed by the contract and local custom. In most Colorado resort communities with local transfer taxes, custom places the obligation on the buyer, but the parties are free to negotiate otherwise. The listing agent's claim of a legal requirement for equal splitting is simply false, and the buyer's licensee is right to challenge it.