Death & Taxes
Thanks to our friend Ben Franklin, we all know taxes are as certain as death….but when we are selling a house, there’s a lot of fees and taxes that are listed in the closing disclosure that you may not know exactly what it is and where you money is actually going. This is part 2 in my 3 part series on taxes.
Additional Fees
When you sell a home, there are a few additional fees to be paid before we can get to your bottom line and fully know what you can expect to walk away from the closing table with. With all of the moving parts its difficult to 100% determine what that amount will be, but during my listing presentation I usually provide a form called the Seller Estimated Net Sheet. (EP47). When we get close to the closing date, you will be given a Closing Disclosure (EP19) that will give the full breakdown, to the penny, that will be the actual amounts for all parties. It is an important part of the whole process and we don’t want to confuse those 2 separate things.
How These Fees Impact You
Taxes are a part of those fees and they surely impact your bottom line. This week we are going to talk about the state excise tax. In last week’s episode, I spoke on the land transfer tax (EP74). This is a tax given to the county when land transfers from one owner to another. The state excise tax is very similar to the land transfer tax, but this fee is going directly to the state of NC.
I am licensed in NC so my knowledge is going to be based on NC law, procedures and standard practices. What happens in Camden, Pasquotank, Perquimans, Chowan and other areas of the Albemarle region is what I am most comfortable with and where I draw my experience from. It is important to recognize that this is different from state to state. Some states may call it something different, so if you are moving to NC from another area be aware that terminology may differ.
The math equation
I am not a fan of algebra. My brain isn’t wired for numbers as my high school math teachers can probably tell you (sorry Mrs Leary and Mrs Malco….it didn’t get any better as I got older). The calculation for the state excise tax is different than the county calculation. You can count on paying $1 for every $500 in sales. A typical $300k home would require a $600 payment to the state. Good news for all of us, is the attorney’s are REALLY good at doing these math problems and will have it sorted out for us in the closing disclosure. I always double check them for my clients, but rarely do I give a math grade of 100 on those…the paralegals are just that good!
One more in the series
I have one more coming to you in the taxes series. Next week we are going to jump into the county property tax discussion. I hope you are finding some value in the post. I enjoy producing them. Please remember to share with your friends and families. I’d love to be chosen to work with you or your sphere of influence when its time for a real estate professional.
Welcome Home!
Chris Whitehurst
Rose and Womble
252 312 2263