Selling a home in Georgia takes more than a buyer, seller, and a closing table. Every real estate transaction has specific fees and taxes that need to be paid before closing. One of the most common but notable is the transfer tax Georgia imposes.
This tax is applied any time the ownership of real property changes. There’s more to it, and there are some exceptions, which is why we put this guide together for you. Knowing when and how the Georgia transfer tax is applied makes it much easier to stay compliant. It’s also the key to avoiding any last-minute surprises at closing.
What Is a Real Estate Transfer Tax in Georgia?
The real estate transfer tax is an excise tax. It’s imposed by the state of Georgia on any transactions involving real estate changing hands. It’s a one-time tax levy imposed when a deed is recorded with the county clerk. The fee confirms the property has officially changed ownership.
Whereas annual property taxes are paid each year, the transfer tax only applies to a transfer. It’s not attached to the property’s value or any future earnings.
In most transactions involving the sale of a home, the tax needs to be paid before the deed can be filed. The transfer tax is basically a way to make sure the state creates a little slice of revenue on all real estate transactions. Real estate transfer taxes are a comparatively minor cost, but they’re tremendously important.
How the Georgia Transfer Tax Works
The Georgia transfer tax is calculated from the property’s sale price. The state transfer tax is a fixed-rate tax applied to this price. The current tax imposed is $1 for $1,000 of value in property conveyed, along with a small additional amount for any fraction thereof.
So, that means if a home sells for $250,000, the total value of tax value would be $250. This tax must be paid at closing, usually handled by the closing attorney or real estate agent. The payment is sent to the county where the property is located, after which it’s processed by the superior court before actual filing.
Georgia law mandates that this one fee be settled as part of the real estate transfer to complete the filing process. Only when this process is completed has ownership legally changed hands in the eyes of the county. That said, it’s always a good idea to confirm the correct amount before closing, so you can make sure the process goes smoothly.
Sellers pay a variety of closing costs, so it’s certainly smart to know what’s just down the road. A little planning can prevent massive delays.
Who Pays the Transfer Tax in Georgia — Buyer or Seller?
The seller is typically responsible for paying the state transfer tax during a real estate transaction. The payment is generally collected by the closing attorney, who pays the county clerk’s office in the county where the property is located. Once the payment is made, the tax and deed are recorded, and the transfer is finalized.
However, just like many parts and costs of a property sale, the responsibility for the tax can be negotiated. Some sale agreements specifically note that the buyer is responsible. This is more common when the home is part of an investment deal or when it’s sold at a lower overall sales price.
No matter who’s paying, the tax must be paid in full before the deed is filed and recorded.
To prevent confusion or misunderstandings, both parties should confirm the payment process with each other during the contract review. While it’s a small cost relative to the transaction, it’s critical to the transaction’s successful closing.
How to Calculate the Georgia Transfer Tax
The transfer tax in Georgia is based on the home sale price. This sale is taxed at $1 per $1,000 in value of the property being transferred. On top of that, if there is any remainder of less than $1,000 at the time of calculation, that remainder is taxed at $1.
If you sell a property for $325,950, you’ll pay a tax of $325 for the first $325,000. However, you’ll also pay another $1 for the last $950. The total tax that you’ll pay for the transaction will be $326. This is a small percentage of the total value, but it fuels the real estate transfer.
Since county offices handle the accounting for all transfer tax payments, it’s usually included with other closing costs. These are disbursed by the attorney. Beforehand, the totals should be verified to prevent delays. This means making sure you’re clear on the difference between assessed value and market value.
Using the Georgia PT-61 Form and Calculator
To make sure a property transfer is recorded, sellers and real estate agents need to fill out a PT-61 form. This document outlines the key details of the property, like the names of the buyer and seller, the sale price, and the deed instrument that’s being filed.
The agent submits the form to the Georgia Department of Revenue’s website. You’ll also find a PT-61 calculator here to figure out your tax amount. While you’re at it, make sure you know how Georgia capital gains taxes work, so you can be compliant with profits from the sale.
Georgia Transfer Tax Exemptions You Should Know
You might be happy to learn that the transfer tax doesn’t apply to every household. Some real estate transfer taxes qualify as exemptions from the transfer tax. Common transfer tax exemptions include an individual who transfers ownership to a spouse or close family member, property that is given as a gift, or property transfers that happen as a result of inheritance.
Other Costs to Expect When Selling a House in Georgia
The transfer tax is just one of several expenses that are unavoidable in almost every home sale in Georgia. Sellers should be aware of additional fees that can move the needle on their final sales price.
Closing Costs and Intangible Tax
In most home sales, the seller will shoulder most of the closing costs. This includes title searches, attorney services, and recording. Buyers who finance may also trigger an intangible tax on the security instrument associated with the loan.
Capital Gains and Other Potential Fees
If your property sold for more than your original cost base, you may also owe capital gains tax at the federal level. This depends on how long you’ve owned the home, and whether it was your primary residence or not. In some counties, you may face small recording fees or administrative costs during filing.
Step-by-Step: How to Handle Transfer Taxes When Selling Your Home
The transfer tax process in Georgia may seem complicated, but breaking each step down can help. Here’s what you can expect when the time comes to sell your home.
Step 1: Review your property deed and sale agreement
Before closing, make sure your deed and sale agreement clearly list who’s responsible for paying the tax imposed. Most of the time, the seller pays, but it can be negotiated between both parties. Confirm that all property details are accurate, including the property conveyed, sales price, and any existing encumbrance or lien that might affect ownership.
Step 2: File your PT-61 form correctly
Your closing attorney or real estate agent will help you complete the PT-61 form, which records key details such as the buyer, seller, sales price, and deed instrument. Filing this form through the Georgia PT-61 online system ensures the transaction is properly logged with the clerk’s office and ready for recording. Double-check that the total consideration listed matches what’s shown on the closing documents.
Step 3: Pay your share of the transfer tax at closing
At closing, your closing attorney will collect the fee and submit it to the county for processing. The payment must be made before the transaction is recorded to make the transfer official. Once everything is submitted, the superior court finalizes the filing, confirming that ownership has successfully transferred. If you own a home in Smith Station that you want to sell fast, a local cash buyer might be perfect.
Avoid the Hassle — Sell Your Georgia Home Fast for Cash with Assured Property Solutions
Dealing with the transfer tax isn’t exactly rocket science, but it can be a hassle. It also takes time, particularly if you aren’t familiar with the process.
Homeowners anywhere in Georgia, or across state lines in Opelika, who need to sell fast and with zero stress, should consider a cash buyer. Local investors like Assured Property Solutions will give you a fair cash offer, with a closing process that can wrap up in days, not weeks.
On top of that, cash buyers typically handle all of the paperwork, too. Legal requirements, preparing the deed, making sure payments are sent on time, and more. They take care of it all.
Conclusion
Knowing your way around the Georgia transfer tax is a crucial step in getting ready to close a home sale successfully. Now you know how the tax is imposed, but you also know who pays it, and when you may be exempt. If you want to skip the confusion and just handle things simply and quickly, Assured Property Solutions is dedicated to helping local homeowners find solutions that fit their needs. Reach out for more information or to get your consultation scheduled.