When buying a home in Arizona, you can usually expect to pay closing costs as part of the deal. These added expenses include several items and usually amount to thousands of dollars on top of what you have already agreed to pay. In some states, closing costs will include real estate transfer taxes. So, what is a real estate transfer tax, and do you have to pay it in Arizona?
Real Estate Transfer Tax
A real estate transfer tax is, as the name implies, a tax that can be levied when real estate is transferred from one party to the other. This tax is imposed routinely by states or municipalities on buyers and sellers when homes and commercial property changes hands. In many cases, the tax is paid by the seller, but there can be circumstances where the buyer pays, or the two divide the expense.
Arizona Real Estate Transfer Tax
Arizona once had a real estate transfer tax. However, in 2008, Arizona voters supported a constitutional amendment to be rid of real estate transfer taxes in the state. Proposition 100, better known as the”Protect Our Homes Act” was enacted in 2009 and is the current law of the land. This amendment means that the state, towns, cities, and municipalities may no longer impose real estate transfer taxes on buyers or sellers.
According to the National Association of Realtors (NAR), Arizona is one of 13 states that does not impose a real estate transfer tax. The NAR opposes the imposition of these taxes on the basis that they burden both buyers and sellers, reduce housing opportunities, and are a poor revenue source for states and municipalities.
Closing Costs and Fees
While not having a transfer tax on your Arizona property transaction is good news, there will be other fees and costs associated with the deal. Closing costs can be high, and if you are the one paying them, it’s important to understand exactly what they cover. Your real estate agent should be able to provide a detailed explanation for each expense. Additionally, your closing documents will also include an itemized list of each closing cost and its price.
Laura B. Bramnick is an experienced Arizona real estate attorney with the expertise you need to understand your closing costs and every other stage of your transaction. If you are seeking an outstanding, client-driven real estate lawyer in Scottsdale, Phoenix, Sedona, and throughout the State of Arizona, contact Laura B. Bramnick to schedule your consultation.