Washington DC transfer and recordation taxes are part of your closing costs when buying or selling real estate. Payment of Washington DC transfer and recordation taxes are typically split between buyer and seller. Make sure you carefully exam your contract regarding who is paying the Washington DC transfer and recordation taxes. Purchasers often ask the seller to pay part or all of their Washington DC transfer and recordation taxes. Your lender should provide you with an estimated costs of closing. The HUD-1 should be reviewed thoroughly before settlement to understand who is paying for these closing costs. You can review a blank HUD-1 here. The taxes will be written into your HUD-1 on lines 1201 through 1206 and you can review this at the time of closing.
The Washington DC transfer tax applies to when you sell a property. The Washington DC recordation tax applies to when you purchase a property. The tax is based on percentages of the purchase price.
If you are buying or selling the property for $399,999 or under then your total tax owed would be 1.1% of the sales price. Example: $325,000 x 1.1% = $3,575. So the buyer and seller would each pay $3,575. DC would be paid $7,150.
If the purchase price is $400,000 and above then you will need to pay 1.45% of the sales price. Example: $450,000 x 1.45% = $6,525. So the buyer and seller would each pay $6,525 for a grand total of $13,050 being paid to the DC government.
The costs associated with Washington DC transfer and recordation taxes make up a large portion of your closing costs. The Washington DC government also charges a recording fee. Recording fees are associated with the recording of deeds, deeds of trust, and other instruments of record. Recording fee's are approximately $290 per transaction and will be shown on the HUD-1 as a charge to the purchaser. Other lender and title costs make up the rest of your closing costs. Washington DC transfer and recordation taxes are not charged on refinances. The HUD-1 is usually available one day prior to settlement for your review. Your settlement company will review this document with you and go through the numbers at settlement. For more information on Washington DC Transfer and Recordation taxes you can go to the Washington DC government website.