A licensee in South Dakota is helping a buyer understand the closing costs on a residential purchase. The licensee correctly explains several features of South Dakota's tax system. Which of the following statements about South Dakota taxes is NOT accurate?
Correct Answer
C) South Dakota imposes a documentary stamp tax on all deeds recorded with the county register of deeds.
South Dakota does NOT impose a documentary stamp tax or any form of real estate transfer tax on deeds. Option C is the inaccurate statement because South Dakota has no deed tax, documentary stamp tax, or transfer tax of any kind on real property conveyances. Candidates who have studied other states (particularly southeastern states that use documentary stamp taxes) frequently and incorrectly assume such a tax exists in South Dakota. Licensees must exclude any transfer tax line item from South Dakota closing cost calculations.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Valuation Question
Background Knowledge for Valuation
Real World Application in Valuation
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Related Topics & Key Terms
Key Terms:
Related Concepts
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
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