What is the real estate transfer tax?
The real estate transfer tax fee, to put it simply, is a fee that is paid on property transfers. Every time the property changes its owner, the fee is collected. Many states impose those kinds of fees. You could have come across different terms such as transfer tax, grantor’s tax, or tax documentary stamps. They all mean the same thing.
In Colorado, we have a real estate transfer tax fee. The closing entity withholds that one-time fee at the time of the closing and remits it to the Colorado Department of Revenue.
How much is the transfer tax?
In the state of Colorado, the fee is no more than 2% of the purchase price. It is important to note, that if the seller has moved out or will move out of state then the amount of the tax to be withheld is the lower of 2% of the sales price or the seller’s entire net proceeds.
Generally speaking, Summit County real estate transfer tax varies depending on the location of the property that is being purchased. It can be anything from 0%-2% of the purchase price.
- Breckenridge
- If the property is within town limits – there is a 1% transfer tax fee.
- In some newer subdivisions on Peak 7 and 8, the transfer tax fee is 2% as a part of the Metropolitan Tax District (e.g. Crystal Peak Lodge, One Ski Hill Place, Mountain Thunder Lodge). Vail Resorts developed the Metropolitan Tax fee for some of its resorts and it is an additional 1% (total of 2%) of the purchase price.
- Frisco
- Within Frisco town limits are subject to a 1% transfer tax fee with a few exceptions.
- Keystone
- Typically 0% transfer tax fee.
- Some exceptions include River Run Village condos subject to a 2% transfer tax fee.
- Blue River, Dillon, and Silverthorne – 0% transfer tax fee.
Given these points, each property that you may be interested in will be discussed individually and determined if the fee applies.
Who pays the real estate transfer tax?
It is a negotiable part in the purchase agreement. However, typically the buyer is the one that pays that fee. Most likely the seller paid that fee at the time of their purchase. It is advised to always talk to your agent and see what is the best course of action in your negotiations.
Where is the fee applied to?
The fee collected from the real estate transfer tax is used to improve the community. Anything from roads, sidewalks, street lighting, and signage. Moreover, in Breckenridge, the monies are allocated to General Fund, which is used for amenities and special events around the town. On the other hand, the Metropolitan Tax fee in Breckenridge is specifically applied to any projects that are involved in enhancing infrastructures around included resorts and complexes.
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Feel free to reach out to me and find out more about transfer tax and start your search for a new dream home. Feel free to reach me at 970-333-0567 or use the contact form on my page.
Thanks,
Aleks Matthews
