Financing in San Francisco>Question Details

Maia, Home Buyer in 94110

Is "State Tax stamp" the same as city or county transfer tax?

Asked by Maia, 94110 Tue Jan 25, 2011

My potential mortgage lender listed this as a potential closing cost (and it's a high estimate too ~$6000), just wondering what this is, and if this is the same as the city or county transfer tax or something else that needs to be paid to the State of California?

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The Good Faith Estimate when it was revised in 2010 requires the transfer tax figure to be listed even if its an expense paid for by the seller along with the HUD-1 which was also updated last year. The revision of the GFE was implemented to protect the consumer in regards to lender and origination fees which prevents those fees from escalating at the close of the transaction as compared to the original quotation. Also, a cash-to-close statement will show that the transfer tax is not incurred by the buyer.
Web Reference: http://www.bma-loans.com
0 votes Thank Flag Link Tue Jan 25, 2011
Maia,

The State of California does not charge a transactional tax on real estate purchases. Most likely this has to do with new HUD 1 regulations about how transfer taxes are listed on the statement. There should be a credit for a similar amount on the statement.

Ask the title company and/or your realtor to make sure. The SFAR Purchase Contract specifies that the seller pays the transfer tax so it would have to be specified in the additional terms or in a separate addendum if you were to pay it.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Tue Jan 25, 2011
Maia

You are a buyer, so why are you paying a "transfer Tax", as some have mentioned. In SF, the seller pays the transfer tax. Furthermore, I also have not heard of this "state tax stamp". Can someone in lending explain this further?

Oggi Kashi
Paragon Real Estate Group
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Tue Jan 25, 2011
@ Shawn - What is the amount based on? What areas is this charged in and where does the money go? I've never heard of a documentary tax or a stamp tax. Can you please explain more?
0 votes Thank Flag Link Tue Jan 25, 2011
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Maia,

I've never heard of this nor have I seen it on any HUD-1 forms. I'd recommend you ask your mortgage broker what it is.
City and county transfer taxes are paid to the city and county. Who pays the transfer tax is done according to "local custom". In SF the seller pays the transfer tax. In parts of San Mateo the seller pays the county tax and the buyer pays the city tax. Questions about who pays what can be answered by your agent and the escrow officer.
Historically folks have been warned about mortgage brokers charging fees that are over and above. The HUD-1 I mentioned is a standard form from the Housing and Urban Development department of the US government. Look for that document and also shop around for loans.
But first ask and listen to the answer of the person that you talked to. It could be a simple misunderstanding but then again it might not.
0 votes Thank Flag Link Tue Jan 25, 2011
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
California does not have a state tax stamp or transfer tax? It may be city or county specific. You need to ask your lender what the charge is and why it is shown as State Tax Stamp. Are you working with a California based lender or some one from another state?
0 votes Thank Flag Link Tue Jan 25, 2011
Maia,

Yes, its referring to the documentary transfer tax along with a city transfer tax if applicable depending on the location. The rate for the transfer tax varies from the city and that information would be attained either by your loan agent or the title/escrow company. The documentary transfer tax is paid for by the seller and it has to be documented on the Good Faith Estimate along with the Initial Fees Worksheet which shows an itemized breakdown of the closing costs.

Best,
Shawn
Web Reference: http://www.bma-loans.com
0 votes Thank Flag Link Tue Jan 25, 2011
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