Real estate transactions in California often involve the payment of documentary transfer taxes, typically imposed at the county level. These taxes are calculated based on the property’s sale price and are generally due upon recording the deed. For example, a property sold for $500,000 might incur a tax of $550 (assuming a rate of $1.10 per $1,000 of value, which can vary by county). While customarily the responsibility of the seller, the actual payer can be negotiated and specified within the purchase agreement.
This revenue stream is crucial for funding essential county services, such as schools, parks, and public safety initiatives. Historically, transfer taxes have provided local governments with a stable income source tied to property market activity. Understanding these taxes is vital for both buyers and sellers to accurately budget and anticipate closing costs. Clear communication between parties ensures a smooth transaction and avoids potential disputes.
