Who pays for transfer taxes?
In Maine, both the buyer and the seller are responsible for paying the transfer tax, with each paying one-half of the total tax, levied at a rate of $2.20 for each $500 or fractional part of $500 of the value of the property being transferred.
Let’s say you’re selling your Maine home for $390,000. Here’s how you can calculate the real estate transfer tax:
Step 1: Calculate the taxable units.
Each $500 of the sale price incurs a tax. So, we divide:
$390, 000 / 500 = 780 units
Step 2: Determine the total transfer tax.
780 units x $2.20 = $1,716
The total transfer tax is $1,716.
Step 3: Divide the tax between the buyer and the seller.
$1,716 / 2 = $858
When you sell your home in Maine for $390,000, you’ll incur a total transfer tax of $1,716, with you paying half of the share, which is $858.
What are the types of transfer taxes?
Transfer taxes will typically vary based on local guidelines but can generally be broken down into three categories — state, city, and county, depending on the state. Here’s a quick look at how it works in Maine:
State transfer taxes
Two transaction types in Maine require a transfer tax. The first one, the sale of real estate, applies to every deed transferring property within the state. The register of deeds calculates the tax based on the property’s value as stated in the declaration of value.
The other one is transfer by controlling interest, which kicks in whenever someone gains or transfers a controlling stake in a business that owns real estate. If this happens, a separate Return/Declaration needs to be filed in the county where the property is located. The local register of deeds will then calculate and collect the tax based on the property’s declared value.
County transfer taxes
Transfer taxes in Maine will also vary by county. For example, in Somerset County, the transfer tax is calculated at $2.20 per $500 of the sale price or value, with all amounts rounded up to the nearest $500. In Cumberland County, the tax is calculated at a rate of $4.40 per thousand.
City transfer taxes
In Portland, Maine, the rate for transfer taxes is $2.20 for every $500 or part of the property’s value that’s being transferred. This tax is equally shared between the seller (grantor) and the buyer (grantee).
Other transfer fees
In addition to transfer taxes, there are possible fees to consider, such as from a homeowner’s association (HOA) or another local neighborhood organization. Again, as these can vary heavily based on location, it’s important to consult a professional.
If you choose the For Sale By Owner (FSBO) route, consulting a professional might help you understand some of the finer points of the process and give you a better idea of what to expect.
