What is the correct answer to: Massachusetts deed excise tax (transfer tax) is:

The correct answer is $2.28 per $500 of purchase price (statewide). Massachusetts General Laws Chapter 64D explicitly sets the deed excise tax at $2.28 per $500 of the purchase price (or fraction thereof), making answer B the correct statutory rate applicable statewide. This rate has been in effect for many years and is a specific, testable fact on the Massachusetts real estate licensing examination, reflecting the Commonwealth's uniform approach to transfer taxation with limited local variation.

What background knowledge is needed for this Transfer Of Title question?

Massachusetts first enacted a deed excise tax in the early 20th century as part of a broader effort to generate state revenue from real property transactions, which were seen as reliable indicators of economic activity and wealth transfer. The tax rate has been adjusted several times over the decades, with the current rate of $2.28 per $500 reflecting legislative adjustments to balance revenue needs with the goal of not unduly burdening real estate transactions. In 2019, Massachusetts authorized Barnstable County to impose an additional transfer tax of up to $1.50 per $500 for affordable housing — a significant development that exam candidates should note as an exception to the otherwise uniform statewide rate.

What is a good way to remember the answer to this Transfer Of Title question?

Remember '$2.28 per $500' by thinking of it as '228 cents for every half-thousand dollars' — the number 228 can be memorized as 'two-twenty-eight,' like a flight departure time (Flight 228 leaves at gate $500!). Alternatively, note that $2.28 is close to the cost of a first-class postage stamp times two — every $500 of real estate value 'costs' about two stamps in transfer tax, which helps anchor the small but precise dollar amount. The key is to distinguish it from the round number $2.00, which is wrong — always add the 28 cents. When calculating, visualize the property price divided into $500 increments, with each increment costing $2.28 in tax.

What exam tip applies to this Transfer Of Title question?

For Massachusetts transfer tax questions, memorize the exact rate ($2.28 per $500) and be prepared to perform a quick calculation on the exam — divide the sale price by 500, round up any fraction to the next whole unit, then multiply by $2.28. Watch out for the $2.00 distractor, which represents an outdated rate designed to catch students who studied older materials. Also remember that while the statewide rate is $2.28, some communities (particularly on Cape Cod) may have additional local transfer taxes, so read the question carefully to see if it asks for the statewide rate or a specific community's rate.

How does this Transfer Of Title concept apply in real world practice?

A Boston condominium sells for $750,000. To calculate the deed excise tax, divide $750,000 by $500 to get 1,500 units, then multiply by $2.28 to get a total tax of $3,420. This amount appears as a line item on the seller's closing disclosure, and the closing attorney purchases the required number of excise tax stamps from the Registry of Deeds before recording the deed. A savvy buyer's agent examining the recorded deed can work backward from the stamps to estimate the sale price, which is one reason transfer tax stamps serve as a de facto public disclosure of transaction prices in Massachusetts.

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Massachusetts deed excise tax (transfer tax) is:

Correct Answer

B) $2.28 per $500 of purchase price (statewide)

Massachusetts deed excise tax is $2.28 per $500 of the purchase price statewide, with some communities adding additional taxes.

Answer Options

$2.00 per $500

$2.28 per $500 of purchase price (statewide)

No transfer tax

1% of sale price

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Related Concepts

Deed

A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.

Deed Requirements (Essential Elements)

For a deed to be valid, it must contain several essential elements including a competent grantor, identifiable grantee, consideration, legal description, granting clause, signature of the grantor, and delivery and acceptance.

Escrow

Escrow is an arrangement in which a neutral third party holds documents, funds, or other items on behalf of the buyer and seller until all conditions of the transaction are met.

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Transfer Of Title Questions

Massachusetts deed excise tax (transfer tax) is:

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