Understanding Nevada’s Transfer Tax: A Quick Guide
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Selling a home in Nevada involves various costs, and one of the key expenses to consider is real estate transfer taxes. These taxes are fees imposed by the state, county, or city when the ownership of a property is transferred from one party to another. Understanding how these taxes work is important for sellers to budget effectively and avoid surprises at closing.
In this short guide, we’ll explore the ins and outs of transfer taxes in Nevada, including who pays them, the different types, and what you can expect to pay when selling your property. This will give you a better handle on the financial implications and help you make a smooth transaction when selling your home.
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Disclaimer: This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of Nevada area tax services or attorneys should not be considered endorsements.
What are transfer taxes?
The Federal Trade Commission defines real estate transfer taxes as state or local taxes imposed when property ownership is transferred from one individual to another. This means that when you transfer the title of your home, which is your legal right to own the property, to a new owner, a tax is levied on this transaction.
The amount you owe in transfer taxes depends on where your property is located, as different states, counties, and cities have their own guidelines.
These taxes, similar to other forms of taxation, are primarily intended to generate revenue for the local government.
Who pays for transfer taxes?
Transfer tax responsibility differs by location, but in Nevada, the buyer and the seller (or grantor and grantee) are equally responsible for the state’s Real Property Transfer Tax. However, there are exemptions, which we will discuss later in this article.
What are the types of transfer taxes?
Transfer taxes will typically vary based on local guidelines but can generally be broken down into three categories — state, city, and county, depending on the state. Here’s a quick look at how it works in Nevada
State transfer taxes
In Nevada, a Real Property Transfer Tax is imposed when real estate is transferred. The County Recorder of the property’s location handles the tax collection when the transfer is recorded. Once all taxes and recording fees are paid, the deed is recorded. The rates are generally the same for all counties, with some exceptions. The rates can also vary by city.
Rates:
For all counties:
- $1.95 for each $500 of value (or fraction thereof) if the value exceeds $100.
Additionally:
- Washoe and Churchill Counties: an extra $0.10 is added.
- Clark County: an extra $0.60 is added. There is also
a tax of $2.55 per $500 of value or fraction thereof, based on the full purchase price or estimated fair market value.
Nye County:
- A Declaration of Value form is required for property transfers.
- RPTT is $1.95 for each $500 of value or fraction thereof, rounded up to the nearest $500.
- No RPTT is due if the taxable value is $0 to $100.
Other transfer fees
In addition to transfer taxes, there are possible fees, 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 with some of the finer points of the process and give you a better idea of what you can expect.
Are transfer taxes deductible?
Unfortunately, transfer taxes are not deductible on your income tax returns. However, there is a way to reduce the amount you owe in capital gains taxes. Capital gains refer to the profit made from selling your home, which is subject to federal taxation, similar to the profits from selling other types of assets.
The IRS allows sellers to consider paid transfer taxes as selling costs. By treating these taxes as part of the selling expenses, you can subtract them from the final sale price of your home. This adjustment helps lower the capital gains taxes owed on any profit earned from the sale.
Transfer tax exemptions
Some transactions might be eligible for exemptions from transfer taxes, depending on their specific circumstances. Common exemptions in Nevada include:
- Changes in organization identity, form, or location with identical common ownership.
- Transfers of title to the United States, any state, or their agencies.
- Title transfers that recognize true ownership status.
- Transfers without consideration between joint tenants or tenants in common.
- Property transfers to a relative within the first degree of lineal consanguinity or affinity.
- Transfers between former spouses per a divorce decree.
- Transfers to or from a trust without consideration if a certificate of trust is presented.
- Transfers of unpatented mines or mining claims.
- Transfers to a corporation or business entity if the person owns 100% of it.
- Transfers for reorganization plans under the Bankruptcy Act.
- Conveyances ordered by the Securities and Exchange Commission.
- Transfers to educational or university foundations.
Estimating transfer taxes for your home sale
For a quick estimation of what you’ll make from selling your Nevada home, try HomeLight’s Net Proceeds Calculator. This tool considers your closing costs, including transfer taxes, agent fees, and any necessary renovations, providing a clear financial picture.
To get an accurate assessment of your transfer taxes and other closing expenses, it’s a good idea to consult a top real estate agent. These professionals can help you navigate the complexities of your home sale, including understanding who is responsible for transfer taxes.
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