Understanding Nebraska’s Real Estate Transfer Tax: A Quick Guide

What are the types of transfer taxes?

Transfer taxes, sometimes called a documentary stamp tax or a documentary transfer tax, are typically due when a property is sold, and can usually broken down by state, city, and county guidelines. In some states, like Texas, there is no transfer tax on real estate property.

State transfer taxes

The Nebraska real estate transfer tax, also known as the documentary stamp tax, applies to real estate transactions statewide. It is levied at a rate of $2.25 per $1,000 of the total value of the property changing hands.

Nebraska’s Department of Revenue has a handy computation table available, which you can use to get a ballpark estimate of what you might owe in transfer taxes based on your home’s value.

For example, a property sold for $150,000 would yield a tax of $339.75.

Other transfer fees

In addition to transfer taxes, there are possible fees to consider, such as from a homeowner’s association or another local neighborhood organization. Again, as these can vary heavily based on location, it’s important to consult a professional.

If you’re selling your home for sale by owner, consulting a professional might help you understand some of the finer points of the process and give you a better idea of what to expect.

Are transfer taxes deductible?

While transfer taxes themselves aren’t deductible on your tax return, there’s a potential silver lining for homeowners.

Capital gains taxes apply to profits from selling a property, and transfer taxes count as part of the selling costs according to the IRS 

This means you can subtract them from your home’s closing sale price, potentially reducing the amount of capital gains tax you owe capital gains. In essence, you’re decreasing your taxable profit.

Transfer tax exemptions

Not all property sales in Nebraska are eligible for transfer taxes. Here is a list of exemptions to Nebraska’s real estate transfer tax:

• Deeds executed and recorded before November 18, 1965
• Government-related deeds: Transfers involving the U.S. government, Nebraska, or their agencies or subdivisions, excluding federally chartered banks and state-chartered financial institutions. Proof of eligibility may be required.
• Debt-related deeds: Deeds securing or releasing debts, such as mortgages or liens, including deeds in lieu of foreclosure and trustee’s deeds for debt compliance.
• Corrective deeds: Deeds confirming, correcting, modifying, or supplementing previously recorded deeds without extending or limiting title or interest.
• Family transfers: Deeds between spouses, parents, children, and certain close relatives without actual consideration.
• Family business transfers: Deeds involving family-owned corporations, partnerships, or LLCs, provided specific conditions are met.
• Tax deeds: Deeds issued for tax-related purposes.
• Partition deeds: Deeds dividing jointly held property among tenants, with each receiving a distinct portion.
• Corporate mergers or consolidations: Deeds made under approved corporate merger or consolidation plans. Partnerships do not qualify.
• Subsidiary to parent transfers: Deeds transferring property from a subsidiary to its parent corporation for stock cancellation or surrender.
• Cemetery deeds: Deeds for cemetery plot sales.
• Mineral deeds: Deeds for mineral rights (timber deeds excluded).
• Court-ordered deeds: Deeds executed pursuant to court decrees, including property settlements, bankruptcy proceedings, or involuntary transfers.
• Land contracts: Land contracts or their memoranda.
• Releases: Deeds releasing reversionary interests, restrictions, covenants, or contingent interests.
• Deeds of distribution: Transfers by personal representatives to heirs or devisees via testate or intestate succession.
• Reservation-related deeds: Transfers of property within Nebraska Indian reservations by or to reservation Indians.
• Trust transfers: Deeds transferring property into or from trusts under qualifying circumstances.
• Partnership or LLC transfers: Transfers from partnerships or LLCs to partners, members, or their spouses.
• Leases
• Easements
• Trustee sales: Deeds transferring property from a trustee to a beneficiary under a trust deed’s power of sale.

Estimating transfer taxes for your home sale

Here are some resources to help you estimate how much you might owe in transfer taxes:

• HomeLight’s Net Proceeds Calculator: This handy tool provides a quick estimate of your potential profit after factoring in closing costs, including transfer taxes, agent fees, and any renovations.
• Consult a Top Real Estate Agent: An experienced agent can provide a more detailed breakdown of your transfer tax liability, factoring in the specific sale price and current market conditions.

Transfer taxes are just one of the closing costs of selling a home. A skilled Nebraska real estate agent can help you manage these costs and better understand your financial picture from the outset. Consult an agent early on in the sales process about transfer taxes, and they can help you make an informed decision before closing the deal.

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