Understanding Washington D.C.’s Transfer Tax: A Quick Guide
Selling a home in Washington, D.C., involves managing several different costs, including real estate transfer taxes. These taxes are fees imposed by the government when a property changes ownership. In Washington, D.C., transfer taxes can significantly impact your final proceeds from the sale.
Our short guide will explain how these transfer taxes work in Washington, D.C., helping you understand what to expect when selling your property. We’ll cover who is responsible for paying these taxes, the different types of transfer taxes, and potential exemptions.
Disclaimer: This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of Washington D.C. area tax services or attorneys should not be considered endorsements.
What are transfer taxes?
The Federal Trade Commission defines transfer taxes as a tax imposed by state or local governments when the title to a property is transferred from one owner to another. Essentially, when you sell your home and transfer its legal ownership, the government charges a tax on this transaction.
The amount you owe in transfer taxes depends on the location of your property, as state, county, and city regulations vary. These taxes, like other forms of taxation, are designed to generate revenue for public services and infrastructure.
Who pays for transfer taxes?
In Washington, D.C., the responsibility for paying transfer taxes typically falls on both the buyer and the seller. However, the exact terms can be negotiated in the sale contract. Often, it is a shared expense, with each party covering a portion of the total transfer tax amount.
