Robert is selling his primary residence in Quincy for $520,000 and simultaneously purchasing a replacement home for $680,000. His listing agent tells him that the deed excise tax is typically a seller's closing cost. Which of the following correctly describes how the deed excise tax applies to Robert's transactions?
Correct Answer
A) Robert pays deed excise tax on the $520,000 sale only, as the buyer pays it on the $680,000 purchase
Under MGL Chapter 64D, the deed excise tax is the seller's (grantor's) obligation in each transaction. Robert, as the seller of the $520,000 property, owes the deed excise tax on that sale. As the buyer of the $680,000 property, Robert is the grantee and does not bear the legal obligation for the stamp tax on that purchase — that obligation falls on the seller of the $680,000 property. Each transaction is treated independently.
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Related Topics & Key Terms
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Related Concepts
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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