What is the name of the tax due to the county and state for recording a deed, which is paid by the seller?

Prepare for the Michigan Real Estate Salesperson Test. Study with flashcards and multiple choice questions, each question includes hints and explanations. Get ready for your exam!

The tax that is due to the county and state for recording a deed, which is typically paid by the seller, is known as the transfer tax. This tax is charged whenever real estate is transferred from one party to another and is calculated based on the sale price of the property. The purpose of the transfer tax is to generate revenue for local and state governments, and it is usually required to be paid at the time of closing, when the deed is officially recorded.

Understanding the transfer tax is important in real estate transactions as it can impact the overall costs associated with selling a property. Sellers should be aware of this financial obligation, as it is part of the closing costs that they will need to cover. Unlike capital gains tax, which relates to the profit made from the sale of the property, or property tax, which is an ongoing tax based on the value of the property owned, the transfer tax is specifically tied to the act of transferring ownership. Recording fees, while related to the processing of the deed, are distinct from transfer taxes and pertain to the administrative costs incurred by the recording office.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy