Who Typically Pays the Transfer Taxes?

Question

Hi All,

I've been going back and forth with negotiations for a lease option and I was wondering if anyone can shed light on who customarily pays for transfer taxes when a home is being sold (through lease option if that matters) the BUYER or the SELLER? Please advice.

Thanks,

Eric

Wayne Brooks · Answer

That will be state specific as to standard practices.  Of course it shouldn't be due until the actual deed transfer.  In most markets I believe it would be traditionally the seller, but of course negotiable.

Eric Miller · Answer

Thanks for your input @Wayne Brooks . That looks to be right on par with what my Realtor friend told me. I'm going to roll with both of your suggestions.

Annunciata R. · Answer

Thats seems fair as either party can simply vary the option terms e.g. reduce or increase monthly lease. I think its a bit like tenant improvement. I once offered a potential tenant a low monthly lease and then she expected me to do all the improvements despite the low price.

Im now a little wiser and if they do improvements they get a low monthly lease if I do improvements they get a higher monthly lease.

Im impressed you convinced the seller into the lease option as I dont see it often.

Eric Miller · Answer

You are correct @Annunciata  R. which is why I'm inquiring. We're negotiating the final terms and that was one of the terms that the seller was challenging me on, covering the transfer taxes.

I actually reached out to a Realtor friend of mine who gave me the answer I was looking for. In case you care to know, he said that it is customary for the seller to cover transfer taxes but it can also be negotiated to split the cost.

Annunciata R. · Answer

I have never done a lease option but I would have thought this needed to be addressed during the packaging of the deal.

Who Typically Pays the Transfer Taxes?

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