In an increasing number of states, counties, and cities, Transfer Taxes (which go by many different names such as documentary stamp tax, real estate excise tax, realty transfer tax) are a way to increase government revenues to pay for government expenses where demand is increasing but revenues are decreasing. Depending upon location, these taxes can range from as little as $2 per transaction to as high as 3 or 4 percent of the sales price.
Determining exactly what is and is not subject to tax is a matter in which Paradigm has unparalleled expertise. Although some may realize personal property can be removed from the sales price (this needs to be done carefully), there are other aspects of the transaction that may also be lawfully excluded from the taxable base.
Our methodology includes ensuring that the Transfer Tax base includes only the amounts that are subject to the tax. Additionally, in portfolio transactions, the purchase price allocation process can also be greatly impacted by consideration of the Transfer Tax implications to provide an excellent planning opportunity. Paradigm reviews all our clients’ previous transactions for potential Transfer Tax refund opportunities and provides appeal recommendations for properties where Paradigm believes there is opportunity for refund.