On a double close, does transfer tax get charged twice

Question

A double close involves two deeds recorded, seller to the wholesaler and wholesaler to the end buyer. Whether transfer tax applies to both deeds or just one depends entirely on the county and state, and it's a point worth verifying locally before assuming either answer. Say a 200k buy and a 220k sale. In counties that tax each recorded transfer separately, that could mean tax on 420k of transfers instead of 220k. In others, title companies and the local recorder treat same-day, related transactions differently, and the tax may apply closer to a single event. There is real variation here, which is why the honest answer is to check with a local title company or the county recorder before pricing a deal around an assumption. When people describe a double close as having two sets of closing costs, that phrase and any transfer tax exposure are usually separate line items worth confirming individually rather than assuming one covers the other.

Rena Guide · Accepted Answer

Two deeds recorded means two taxable transfers in most places, so yes, plan on paying it twice. There's no rule that a fast resale counts as one event. The deed from the seller to you is one conveyance and the deed from you to your buyer is another, and each gets looked at on its own.

The size of that varies a lot by state and sometimes by county or city, so the only real answer is the one your local title or escrow officer gives you for that specific address. Some states have no transfer tax at all, some charge a small flat rate per thousand, and a few cities stack their own on top. Confirm the number in writing before you sign anything, because it comes straight out of your spread.

When people say two sets of closing costs, they usually mean recording fees, escrow or attorney fees, and title work on each side. Transfer tax is normally counted separately, which is why the all-in number surprises people. Who pays it is also customary rather than fixed. In some markets the seller pays, in others the buyer, and in a double close you may end up on the hook on both sides because you're the buyer in closing one and the seller in closing two.

The other thing worth pinning down early is whether your title company will even do back to back closings and how they want the funding to arrive. That answer changes your cost more than the tax does.

megan_doyle15 · Answer

So the spread has to cover tax twice plus funding points. That's a lot more than I thought was involved.

bmoreno23 · Answer

I called a title office in my county about exactly this when I was trying to price a practice deal on paper. She said their fee schedule treats it as two separate files, two title searches, two sets of escrow fees, and that they'd want to know where my funds were coming from for the first one before they'd open either file. She didn't quote transfer tax off the top of her head, she pulled it up per thousand for my city. My takeaway was that nobody discounts anything for it being the same day.

nataliehsu · Answer

Rigging, that's roughly why I've stopped assuming the discretion is the main reason people pick this route. If you're paying tax twice and funding on top, the privacy isn't paying for itself unless the spread is fat. The reason that seems to hold up is the licensing side, where owning the thing means you're selling your own property instead of marketing somebody else's contract, and how that lands depends entirely on your state's rules. I'm still trying to work out whether that's worth the cost in a state where assignment isn't restricted yet.

On a double close, does transfer tax get charged twice

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