Tom is a licensed Montana real estate agent helping a buyer finance the purchase of a home in Missoula. The buyer asks Tom whether they will need to pay Montana state sales tax on the purchase price at closing. How should Tom correctly respond?
Correct Answer
D) No, Montana has no general state sales tax, so no sales tax applies to the real estate purchase.
Montana is one of only five U.S. states with no general state sales tax. As a result, no state sales tax is imposed on real estate purchases or any other consumer transactions in Montana. Buyers and agents from other states sometimes incorrectly assume a sales tax component exists in Montana closing costs. This is a Montana-specific distinction that affects how closing costs are calculated.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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