Sorts of switch taxes
With regards to switch taxes, it’s all about location, location, location. You possibly can count on switch taxes for homes on the market in San Francisco and different massive metro areas to be a lot completely different than a quaint however tiny metropolis like Cambria. In response to Fuller, switch taxes break down at a state, county, and metropolis degree, which means you’ll in all probability pay one thing to all three. And on high of that, you will have to pay a neighborhood owners affiliation switch charge.
Every governing physique levies switch taxes and costs at completely different charges. Right here’s a breakdown:
State switch taxes
State switch taxes are the one one-size-fits-all tax for residence gross sales in California. The state levies a California switch tax of $0.55 per each $500 of residence worth. For instance, a vendor in Tahoe who sells their property for the median residence worth of $695,000 pays the identical tax price as a vendor in Orange who sells their residence for the native median residence worth of $1,070,000.
Nevertheless, notice that the frequent denominator right here is the speed, not the quantity due. Since taxes are commensurate with residence worth — assuming our instance sellers every had a house of median worth — the vendor in Orange would find yourself paying $1,177 in state switch taxes in comparison with the vendor in Tahoe, who would solely pay $764.5.
County switch taxes
Counties in California also can leverage taxes on title transfers. Nevertheless, in contrast to state switch taxes, county switch tax charges range throughout the state.
For instance, a pair promoting a house in Los Angeles County would pay a county switch tax of $1.10 per $1,000, whereas a pair promoting in Napa County would solely pay $0.55 per $1,000. If these sellers’ properties had been of equal worth to different homes on the market in Los Angeles, this couple would pay double the quantity in county switch tax in comparison with the couple in Napa.
Metropolis switch taxes
Some cities, too, impose a tax on the switch of titles. Like county switch taxes, these charges can differ from metropolis to metropolis and have probably the most nuance of all tax tiers.
Take the tax charges of Culver Metropolis and Pomona for instance. Although these cities are simply an hour and 15-minute drive from one another, Culver Metropolis has a switch tax price of 0.45%-4.0% of residence worth, whereas Pomona’s price is simply $2.20 per $1,000.
Secondly, some California cities impose variable switch taxes, which means they leverage taxes at tiered charges based mostly on residence worth. For instance, check out how San Francisco divides its tax tiers:
- Properties valued at greater than $100 however lower than or equal to $250,000 are taxed $2.50 for every $500.
- Properties valued greater than $250,000 however lower than $1,000,000 are taxed at a price of $3.40 for every $500.
- Properties price $1,000,000 or extra however lower than $5,000,000 are taxed $3.75 for every $500.
- For properties valued at $10,000,000 or extra however lower than $25,000,000, a $27.50 tax is levied for every $500.
- And houses price $25,000,000 or extra are taxed at a price of $30.00 for every $500.
Different switch charges
The state, metropolis, and county are the one our bodies formally in a position to impose taxes, however Fuller factors out that owners associations and different neighborhood organizations might cost switch charges.
“[There’s often] a fee associated with transferring the buyer’s name on to the homeowners association or moving the seller’s off, providing new keys and codes, and fobs to pools and clubhouses,” he explains.
