Massachusetts transfer tax: the deeds excise, rate and payer

What is the deeds excise?

Chapter 64D, § 1 puts an excise on any deed or other writing that conveys real estate to a buyer for more than $100. The tax is charged per $500 of “consideration” (the price), and each fraction of $500 counts as a full $500. The statute measures consideration “exclusive of the value of any lien or encumbrance remaining thereon at the time of the sale,” so a debt that stays on the property is not taxed.

The tax is paid with stamps. Section 3 says the Department of Revenue prepares adhesive stamps and that registers of deeds sell them.

What is the rate?

The Barnstable County document explains the split. After 1992, the state share in Barnstable County is $3.42 per $1,000 and the county adds $3.06 per $1,000, from a 2016 county ordinance. Barnstable is the only county with its own excise.

A note on the statute: the text of § 1 on the Legislature’s site prints a base of $2.00 per $500 ($1.50 in Barnstable County). The $2.28 and $3.42 figures are what the county’s document reports as the state’s rates in effect. Confirm the amount with the registry of deeds before closing.

Who pays?

By law, “the tax imposed by this chapter shall be paid by the person who makes or signs the deed, instrument or writing, or for whose benefit the same is made or signed” (§ 2). The person who signs a sale deed is the seller, so the seller owes the excise. The buyer’s own recording costs are separate; see closing costs in Massachusetts.

How do you calculate it?

1. Take the price, minus the value of any lien that stays on the property.
2. Divide by $500 and round up to the next whole number. A fraction counts as a full unit.
3. Multiply by the rate for the county: $2.28 outside Barnstable County, $3.24 in Barnstable County.

For example, a $435,200 sale in Suffolk County is 871 units (435,200 ÷ 500 = 870.4, rounded up), so the excise is 871 × $2.28 = $1,985.88. The stamps are purchased through the registry of deeds (c. 64D, § 3), and the deed is recorded with them. The rest of the costs at closing are in closing costs in Massachusetts.

Exemptions

Section 1 states that the chapter does not apply to:

• any instrument given to secure a debt, such as a mortgage;
• any deed or writing to which the Commonwealth, a city or town, or the United States or their agencies are a party.

Example: an $800,000 sale

This is an example, not a quote. Assume an $800,000 price with no lien staying on the property.

A price of $800,100 would add one more $500 unit, because a fraction counts as a full unit.

Does Boston charge its own transfer tax?

The statutes and city pages read for this article do not give Boston a transfer tax. If a city transfer fee is proposed, check malegislature.gov for the current bill. What Boston does tax is ownership, through the property tax: see Massachusetts property tax and the Boston guide.