A closing attorney in Georgia is preparing a settlement statement for a $350,000 home purchase with a $280,000 loan. How should the attorney correctly calculate the deed transfer tax and the intangible recording tax?
Correct Answer
B) Calculate the deed transfer tax on the $350,000 sale price and the intangible recording tax on the $280,000 loan amount, using each tax's own rate.
Under Georgia law, the deed transfer tax (O.C.G.A. § 48-6-1) is calculated on the actual consideration or sale price at $1.00 per $1,000, while the intangible recording tax (O.C.G.A. § 48-6-61) is calculated on the face amount of the new loan at $1.50 per $500 ($3.00 per $1,000). Each tax has its own distinct base and rate, and mixing them is a common exam error.
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More Ga Property Tax Questions
A Georgia homeowner's property has a fair market value of $220,000. She does not qualify for any floating homestead exemption and receives only the standard $25,000 homestead exemption (applied to fair market value before the 40% assessment ratio). If the county millage rate is 15 mills, what is her annual property tax?
A Georgia homeowner has been receiving the standard homestead exemption on her primary residence in Atlanta. She sells that home and moves permanently to a property she previously used as a vacation home in Rabun County. What must she do regarding her homestead exemption?
A seller paid the full annual property taxes of $3,650 on January 1st for the entire calendar year. The closing takes place on September 15th, and the seller is responsible for the day of closing. Using the 365-day method, what credit does the seller receive at closing for the buyer's share of the taxes?
A Georgia owner begins an ad valorem tax estimate with the property’s fair market value. What percentage of that value is generally used as the assessment basis under Georgia law?
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- → An investment property in Georgia generates $48,000 in annual net operating income. Using the income approach with a 7% capitalization rate, an appraiser determines the property's fair market value. If the county assesses at 40% of fair market value and the total millage rate is 32.5 mills, what is the approximate annual ad valorem tax?
- → Sarah is purchasing a home in Fulton County for $285,000. The property will be financed with a new mortgage of $228,000. What is the total Georgia intangible recording tax due on this transaction?
- → Lisa is a real estate agent helping her client understand closing costs in Gwinnett County. Her client asks about the difference between transfer tax and intangible recording tax. What should Lisa explain?
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- → A property owner in Clayton County receives an assessment that appears incorrect. Which of the following would NOT be an appropriate basis for challenging the assessment under Georgia law?
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Previous Question
A Georgia buyer is financing the purchase of a single-family home and notices two separate tax line items at closing: one related to the deed and one related to the promissory note. Which statement correctly describes how these two taxes differ under Georgia law?
Next Question
Under Georgia law, which party is primarily responsible for paying the real estate transfer tax on a deed, and can that responsibility be changed?