Transfer Tax

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Definition of 'Transfer Tax'

A transfer tax is a tax levied on the transfer of ownership of property from one person or entity to another. Transfer taxes are typically imposed by state or local governments, and the rates vary depending on the type of property being transferred and the location of the property.

There are a number of different types of transfer taxes, including:

* **Real estate transfer taxes:** These taxes are levied on the sale of real estate, and the rates are typically based on the sale price of the property.
* **Gift taxes:** These taxes are levied on the transfer of gifts between individuals, and the rates are based on the value of the gift.
* **Inheritance taxes:** These taxes are levied on the transfer of property from a deceased person to their heirs, and the rates are based on the value of the property.

Transfer taxes can be a significant cost, so it is important to be aware of them when you are planning to buy or sell property, or when you are making a gift. You should also consult with a tax advisor to make sure you understand your obligations and to minimize your tax liability.

In addition to the taxes listed above, there are a number of other types of transfer taxes that may apply in certain situations. For example, some states impose transfer taxes on the sale of personal property, such as cars and boats. And, in some cases, transfer taxes may also be imposed on the transfer of business interests.

If you are not sure whether a transfer tax applies to your situation, it is best to consult with a tax advisor.

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