New buyers (and some
not-so-new buyers) are always a little surprised at the closing table when
looking at the HUD-1
closing statement and noticing a myriad of additional charges.
Most charges from the lender or mortgage company are estimated early in the loan process as a requirement of the good faith estimate. However, there area number of additional charges that are often not estimated or even discussed prior to closing. The Maine Real Estate Transfer Tax is one of the costs for Maine buyers and sellers that is often forgotten in initial estimate of closing costs.
The transfer tax is assessed on deed transfers in Maine, and split evenly between the buyer and seller upon closing.
(Maine identifies 20 exemptions to this tax; see below)
Here is the formula for calculating the tax:
Price of the sold property, rounded to nearest $500 Ã· 500; multiplied by $2.20; split and paid evenly by buyer and seller.
Here is an example:
$200,000 Price of sold property
Ã· 500 Divided by 500
= 400 Number of 500's in 200,00
400 x $2.20= $880
Buyer share= $440
Seller share= $440
Many make the mistake of assuming that multiplying by $4.40 and divided by 1,000 will yield the same result. The state of Maine requires a rounding to the nearest $500 and numbers will be calculated differently if that is not done first.
Maine Transfer tax is assessed on sales in the state and once you know the final declaration of value, the math makes it easy to help plan your closing dayâ€™s costs.