Transfer Taxes

A tax that we don’t pay.  We’re fortunate in Texas that we don’t have to pay transfer taxes on real estate transactions.  In fact, we’re one of just 13 states that don’t have this tax.  For Texans, the prohibition on a transfer tax has been enshrined in our state constitution since 2016.  That doesn’t mean it can’t be changed in the future, but the hurdles are quite high.  So what exactly is a transfer tax?  Just as its name implies, the tax is paid whenever a piece of real estate transfers ownership.  In some places it’s paid by the buyer, some the seller, and in others, both.  For example, for a $500,000 house in Chicago, the city, county, and state transfer taxes total up to $3,750 for the buyer and $2,250 for the seller.  That’s a lot of money that Texans don’t have to pay.