REAL ESTATE TRANSFER TAXES ON WARRANTY DEED

REAL ESTATE TRANSFER TAXES ON WARRANTY DEED

    In the state of Arkansas, the "revenue tax" that you see on Warranty Deeds is based on a total of 3.3% of the sales price; so on a $100,000 transaction, the buyer and seller would each pay a combined amount of $330.00 at closing for this tax. This amount is customarily split between the buyer and the seller unless the contract stipulates that it be handled differently.

    There are a number of instances when this "tax" can be exempt. For example, if you have a sales price that is $60,000 or less and the buyer is getting a FHA or VA loan, then they can be "revenue exempt", which means that the entire transaction will be exempt, helping eliminate this cost to buyer and seller, --provided the buyer nor the spouse of the buyer has not owned a home within three years of the closing date. The buyer is required to sign a form at closing stipulating these facts (to be recorded with the Warranty Deed) and the reason for the exemption.

  You can check with the Revenue Office for a complete list of exemptions, but a few others are:

  **No tax would be due on certain family transactions or gift transactions where the consideration was less than $100.00;

  **Transfers to or from the United States, the state of Arkansas, or certain agencies or political subdivisions;

  **A re-recorded instrument;

  The revenue tax charges have fluctuated throughout the years, but 3.3 per thousand based on the sales price is what is currently being charged in the state of Arkansas.