Understanding New Hampshire’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 New Hampshire? One cost you’ll need to factor in is the real estate transfer tax. This tax is levied when ownership of a property changes hands, and it can impact your net proceeds from the sale.
Our short guide will help you understand how transfer taxes work in New Hampshire, detailing what sellers can expect to pay. We’ll cover who is responsible for paying these taxes, the different types that may apply, and any potential exemptions.
Connect with a Top Agent to Help Maximize Value
Even rockstar agents can’t make your tax liability disappear, but HomeLight data shows that the top 5% of agents across the U.S. help clients sell their home for as much as 10% more than the average real estate agent, helping offset the tax bill.
Disclaimer: This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of New Hampshire area tax services or attorneys should not be considered endorsements.
What are transfer taxes?
Real estate transfer taxes are defined by the Federal Trade Commission as a tax payable to state or local governments when property ownership is transferred from one person to another. In simple terms, when you transfer the title of your home—your legal right to the property—to a new owner, a tax is imposed on this transaction.
The amount of transfer tax you owe depends on the location of your property, as it is determined by state, county, or city regulations. Similar to other forms of taxation, these transfer taxes are implemented to generate revenue for the government.
Who pays for transfer taxes?
The responsibility for paying transfer taxes can vary, but in New Hampshire, it is the responsibility of both the buyer and the seller. Typically, each party covers half of the total transfer tax amount, but this can change based on the terms of the transaction agreement.
What are the types of transfer taxes?
Transfer taxes will typically vary based on local guidelines but can change based on state, city, or county mandates, depending on the state. Here’s a quick look at how it works in New Hampshire.
State real estate transfer taxes
In New Hampshire, transfer taxes are levied at a rate of $0.75 per $100 of the total price or consideration of the property changing hands. If the property in question is sold for less than $4,000, a minimum tax of $20 is levied on both the buyer and the seller.
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 with some of the finer points of the process and give you a better idea of what you can expect.
Are transfer taxes deductible?
Transfer taxes are not deductible on your income tax return. However, there is a way to reduce your capital gains tax liability. Capital gains, which are the profits from the sale of your home, are taxable by the federal government, just like profits from other asset sales.
Sellers can treat the transfer taxes they paid as selling costs. By doing so, they can subtract these costs from the final sale price of their home, effectively lowering the capital gains tax owed on any profit made. This strategy can help minimize the overall tax burden when selling your property.
Transfer tax exemptions
In New Hampshire, some sellers might qualify for exemptions from transfer taxes depending on their specific circumstances. Common exemptions include:
- Non-contractual transfers
- Transfers between spouses due to a final decree of divorce or annulment
- Filing a deed or instrument to correct an existing deed
- Transfers to the state of New Hampshire, a county, municipality, or other political subdivisions
- Transfers of cemetery plots
- Transfers by devise, intestate succession, descent, or death of a joint tenant
- Transfers of interests in certain low-income housing projects with federal, state, or local rental housing affordability covenants, provided the transfer tax was paid when the property was initially acquired
Estimating transfer taxes for your home sale
To get a quick estimate of what you might make from selling your New Hampshire home, try HomeLight’s Net Proceeds Calculator. This tool factors in your closing costs, including transfer taxes, agent fees, and any renovation expenses, giving you a clear picture of your potential financial outcome.
For a more accurate assessment of your transfer taxes and other closing expenses, it’s a good idea to consult with a top real estate agent. These costs, often assumed to be the responsibility of either the buyer or seller, can actually be negotiated depending on the market conditions. Discussing transfer taxes with your agent from the outset will help you understand your options and potentially negotiate these expenses.
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