Here in Massachusetts and other states we have, in essence, a sales tax on the sale of a home. The tax is called Tax Stamps. Actually, they are state excise tax stamps.
Most home sellers are not aware this tax even exists. Tax Stamps are probably the second biggest expense for the homeowner right behind the commission. When it comes time to complete the listing paperwork I make sure my client understands tax stamps and the cost to them.
In Massachusetts, the general rule of thumb is, tax stamps cost $4.56 per $1000 of the sale price. If the sale price is $300,000 then your tax stamp cost is $4.56 x 300 or $1368. The number is listed on Line 1203 of the HUD-1. The deed cannot be recorded and the sale cannot be closed until the Registry of Deeds has confirmation the tax stamps have been paid. Please note that Barnstable County charges $5.70 per $1000 while Dukes & Nantucket County charge an additional 2% of the sales price which goes to the local land bank commission.
Many folks in Massachusetts, in an attempt to escape Massachusetts taxation by moving to New Hampshire, have been taken by surprise. In NH the "Real Estate Transfer Tax" is $15 per $1000 of sale price and the Buyer & Seller split the cost of that tax. So $7.50 x 300 = $2250 both buyer and seller pay.
I've often wondered when other people's money runs out what will the government do?