Buying or selling a home in the San Francisco Bay Area involves understanding various financial aspects, including transfer taxes. These one-time taxes can vary significantly depending on the county and city where the property is located. In this updated guide for 2020, we'll delve into the transfer tax rates in different Bay Area counties and cities, as well as the customary practices regarding who pays these taxes during real estate transactions.
Understanding Transfer Taxes in the Bay Area: Transfer taxes are fees imposed on property buyers and sellers when a property changes ownership. In the Bay Area, these taxes are typically paid at the close of escrow and can vary based on the property's location. The responsibility for paying transfer taxes often depends on local customs and practices.
Alameda County Transfer Taxes:
- In Alameda County, the seller typically covers the county transfer tax, which is around $1.10 per $1,000.
- The city transfer tax varies by city, but it is customary for the city transfer tax to be split 50/50 between the seller and the buyer.
- In the case of distressed properties, buyers may be responsible for paying 100% of the transfer taxes.
Contra Costa County Transfer Taxes:
- Contra Costa County has a county transfer tax of $1.10 per $1,000, which is usually paid by the seller.
- The City of Richmond imposes an additional transfer tax, and it is common for buyers and sellers to split this tax equally.
Marin County Transfer Taxes:
- In Marin County, the county transfer tax is typically $1.10 per $1,000, paid by the seller.
- The City of San Rafael may charge an additional transfer tax, typically covered by the seller.
San Francisco County Transfer Taxes:
- In San Francisco County, sellers typically pay the county transfer tax, which is approximately $1.10 per $1,000.
- Buyers are responsible for recording, title, and insurance costs.
- City transfer taxes in San Francisco vary based on the sales price, and it is customary for the seller to pay these taxes.
San Mateo County Transfer Taxes:
- San Mateo County has a county transfer tax of $1.10 per $1,000, typically paid by the seller.
- The City of San Mateo and Hillsborough charge additional transfer taxes based on the property's value, often shared between buyers and sellers.
Santa Clara County Transfer Taxes:
- In Santa Clara County, the county transfer tax is typically $1.10 per $1,000, paid by the seller.
- City transfer taxes in Mountain View, Palo Alto, and San Jose are typically split 50/50 between buyers and sellers.
Understanding the customary practices regarding transfer tax payments is crucial for both buyers and sellers. While county transfer taxes are relatively consistent across the Bay Area, city transfer taxes can vary widely. Buyers should be prepared to potentially cover a portion of these taxes, especially in cases of distressed properties, while sellers typically bear the county transfer tax burden. Consulting with a knowledgeable real estate professional or attorney can provide further clarity on transfer tax responsibilities in your specific location and transaction, ensuring you make informed financial decisions throughout the real estate process in the Bay Area.
In conclusion, knowing who pays what in terms of transfer taxes is essential for budgeting and making informed decisions during real estate transactions in the San Francisco Bay Area.