Transfer Tax

Congratulations...you just bought a house! But what are all of those closing costs for, anyway? They sure do add up.

When you buy a house or some property, one of the line items you’ll have to pay is the transfer tax. A transfer tax is the tax applied to any property transfers. Any transfers that require a registration of the transfer will be taxed. Namely real estate, but also shares and bonds.

Back in ye olden days, there was a stamp duty: a tax levied on legal documents. That’s not a thing so much anymore (at least not in the U.S.), but we still pay real estate transfer taxes. Plus, sometimes you have to pay a notary to make it supes official (yeah...the costs just keep coming). In the UK, there’s an inheritance tax...another type of transfer tax.