When is it necessary for a seller to pay transfer taxes?

The correct answer is that a seller is required to pay transfer taxes when recording a deed to transfer ownership. This tax is a one-time fee imposed by the state or local government at the point of transferring property from one owner to another. It is typically calculated based on the sale price of the property and is due when the new deed is submitted for recording in the county clerk or register of deeds office. This process ensures that the change of ownership is officially recognized and recorded, making it a legal transaction.

Other scenarios, such as buying a new property, closing a mortgage loan, or during property appraisals, do not directly involve the transfer of ownership documentation and thus do not trigger the transfer tax obligation. While financial transactions or assessments may involve various other fees, they do not relate to the immediate legal documentation that necessitates the transfer tax.