WHAT are Transfer Taxes? HOW Much are They? WHO Pays?

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI


WHAT are Transfer Taxes?

HOW Much are They? 

 WHO Pays?



When I first speak with clients seeking information regarding mortgage financing, they're typically focused on 3 things:

  1. What Down Payment they will need
  2. What their Interest Rate will be
  3. Can they get Approved for a Mortgage


The answers to those questions are definitely needed and vitally important. But they are not questions quickly answered.  

I must first obtain some information in order to be able to answer their questions credibly and reliably.  This includes information regarding their finances, debt, credit, savings and more.  

As the needed info is shared and our conversation unfolds, questions go back and forth between us.  Much like a ping pong ball, the questions bounce back and forth quickly and fluidly providing each of us an opportunity to get to know one another and for fact-finding.   

It's during this conversation that the mortgage process, its direction, and needs and expectations that go along with it are normally laid out.  A time-frame for the process is provided.

It's also during this talk that the subject of monies required for costs/Closing is discussed.  Many hopeful homebuyers are surprised to find out that costs ... beyond those surrounding down payment ... are typically involved when borrowing money.  The existence of these costs and the need for their payment can come as quite a shock, especially to first-time home buyers.

A full explanation of these costs and why they are charged must then ensue.  Those Closing Costs explained and covered are:

  • Lender Application Fee .. OR .. Appraisal Fee
  • Appraisal Fee (Paid @ Application) If not Application Fee
  • Credit Report (Paid @ Application OR @ Closing)
  • Tax Service Fee
  • Flood Certification
  • Home Inspection (Paid @ time of Inspection)
  • Lender's Origination Fee (Paid @ Closing)
  • Title Fees & Title Insurance (Paid @ Closing
  • First Year's Homeowners Insurance Premium (Paid @ Closing or immediately prior to)
  • Possible Cost:  Homeowner's Association Documents & Questionnaire (If Applicable on Condos, PUDs)
  • Recording Fees (Paid @ Closing)
  • Transfer Taxes (These vary by City, County, State ... and by terms of Contract)  Often paid by Seller.
  • Attorney Fee (Common in Illinois.  Paid @ or after Closing)

I find that the cost/fee (included in the list above) that most often confuses, "trips up" or causes last-minute panic for my clients (and sometimes their real estate team) is that of Transfer Taxes.  It's not unheard of that this fee is addressed at the 11th hour leading up to Closing.


  • What are Transfer Taxes?  
  • Who is charging them?  
  • And who pays them?


#1:  What are Transfer Taxes?

Transfer Taxes are those taxes that are imposed at the time that real estate property experiences a transfer of title.  

Transfer Taxes are based on the value of the property transferred. 


The Recorder of Deeds/Registrar of Titles in each county collects the tax via the sale of revenue stamps that each county purchases from the IL Department of Revenue. That stamp may also provide evidence of the payment of a county real estate transfer tax.

Transfer taxes can be known by many names, such as "deed tax", "stamp tax", or "mortgage registry tax", depending on your locale.  Transfer Taxes should not be confused with mortgage recording taxes or recording fees paid at the time of Closing.

In Illinois, the sales price or the fair market value of the property sold dictates the amount of Transfer Taxes paid.  Again, the State of Illinois has a transfer tax that is typically paid by sellers and is set at a rate of $1.00 per thousand, or $100 per $100,000 of property value.  

Other states may utilize another equation for calculation of Transfer Taxes.  Please consult your real estate professional for further information regarding your local practices.

Note:  A tax professional should be consulted for advice regarding the deductibility of any Transfer Tax paid.

#2:  Who is charging Transfer Taxes?  

For those in Illinois:  Click HERE for info (as of 1-1-2019) regarding those municipalities and counties that have Transfer Taxes.  

For elsewhere:  Please refer to the info provided by the National Association of Realtors (NAR) or consult your local real estate professional to see if a Transfer Tax cost is involved in your real estate transaction.

#3:  Who pays the Transfer Taxes?

Transfer Taxes can vary from municipality to municipality and county to county within the State of Illinois.  Depending on your location, a Transfer Tax can be paid either by buyer or seller.  Payment should be negotiated at the time of contract.   

Again, for those outside of Illinois, local customs may dictate different payment methods.  What is common practice in one county/state may not apply elsewhere.

No matter which party agrees to pay the Real Estate Transfer Taxes, the taxes are shown on the Closing HUD Settlement Form.  Some Lenders require that proof of payment be supplied prior to Closing time.  Inquire with your Lender for directions regarding this matter.  

Potential homebuyers must be aware and informed regarding Real Estate Transfer Taxes (and all other Closing Costs), as they are a normal cost involved in real estate transactions in many states.  That way they will be prepared for all costs that may be incurred as they enter their real estate transaction.
The bottom line is that the mortgage process doesn't need to be confusing or challenging.  Closing Day can be completely successful and stress-free when clients are fully-informed, educated, and prepared.  

For information regarding Transfer Taxes, Closing Costs and all things surrounding mortgage financing, in Chicagoland - IL - WI, reach out to me via the info found on my mortgage website:  www.genemundt.com.
* Hoping to buy or refinance a home or investment property in New Lenox - Will County or elsewhere in the Chicagoland - IL - WI area?

Contact me today. I'll put my 40+ years of mortgage experience hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Lender - NMLS #216987 - IL Lic. #0006220 - WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656


Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 


Your Referrals & Testimonials are Always Greatly Appreciated! 




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Show All Comments
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Gene- I'll bet that there are many who don't understand everything they're being charged at closing. You've done a great job of explaining it. 

Oct 30, 2019 05:30 PM #1
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Gene... great explanation of something that many buyers and sellers forget or don't know about and their agents rarely discuss. In my market transfer taxes are paid by the seller except in new construction when the buyer pays them.

Oct 31, 2019 05:17 AM #2
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - it is one of those taxes people don't understand.  It usually gets explained by the real estate attorney in New York.

Oct 31, 2019 08:20 AM #3
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good information to share with prospective home buyers.

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Oct 31, 2019 11:15 AM #4
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene here in CT we call it a Conveyance Tax, and it is paid by the Seller.  Our Conveyance Tax is much higher than your Transfer Tax.  Depending on the city or town it can be as much as 1.75% of the sale price.  That is a big bite out of a Sellers profit.

Oct 31, 2019 01:09 PM #5
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Gene:

Great education here for buyers. The list of fees adds up and buyers need to be informed (and sellers, too) in advance so they are prepared. Here the buyer normally requests the seller to pay the county transfer tax, $1.10 per $1000.


Nov 01, 2019 01:08 PM #6
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

One of the towns I work in is Wilmette - they have a transfer tax of $3.00/purchase price that the buyer pays. Every Wilmette listing states that and of course, every buyer wants to know what the heck that means. The cost can add up if the home is high-end.

Nov 02, 2019 06:41 PM #7
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Thanks for the clarification because transfer taxes can be more than a little tricky for a lot of people who don’t understand the process.

Nov 02, 2019 10:14 PM #8
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Margaret, I can see how that could be a little bit “taxing” on my mind so to speak. Not necessarily surprised.

Margaret Goss

Nov 02, 2019 10:16 PM #9
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Great explanation of transfer fees (in NC recording fess). In our market sellers pay these fees. 

Nov 03, 2019 12:43 PM #10
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Some transfer taxes can be very very costly--like the ones charged in the UK!  Fortunately here in the KC metro area, Kansas does charge a small tax --but it all adds up

Nov 06, 2019 01:26 PM #11
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

We could make a manual out of all the informative and constructive content people share daily here at ActiveRain. 

Nov 07, 2019 10:31 AM #12
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives


Congratulations on a FEATURE story that is educational and very informative. Many people do not know what to expect and you lay it all out here as a true and experienced Mortgage Lender and an advocate for the truth and integrity. It would be such an honor to work with you on a real estate transaction. I wouldn't hesitate to refer you to buyers in your area of Illinois. 

Nov 07, 2019 10:46 AM #13
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

This is one of those things that has changed in Georgia while I've been in the business.  When I started in 92 sellers paid the 1.00 per thousand (still the same rate) and the standard contract said "sellers pay transfer tax" but in 2008 all costs with the one exception of the prorated property taxes shifted to buyers and a seller now has a "contribution to buyer costs" blank that can be from zero up to 6% depending upon the loan and negotiations, but with me selling mostly second homes it's very rare for a buyer to need or ask a seller to pay closing costs.

Nov 07, 2019 02:35 PM #14
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

SUCH a great post, Brother Gene! Fantastic explanation of transfer taxes and something that we should all be sharing with my clients.

I've heard so many sellers in our area who are suprised when they get to Closing, having to pay the transfer taxes. I eliminate that surprise by providing a Seller Net Sheet for everyone - it helps keep down the surprises at Closing!!

Buyers of new construction pay that fee here - so, we have to explain that to them up front too, typically during their out-of--pocket cost discussion.

Nov 07, 2019 09:51 PM #15
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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