How to Calculate Real Estate Transfer Tax in Georgia

Real estate transfer tax is a levy imposed when real property ownership changes. In Georgia, this tax is an excise tax on the privilege of transferring real estate. This guide clarifies its purpose, how taxable value is determined, applicable exemptions, calculation methods, and reporting procedures for Georgia real estate transactions.

What is Georgia Transfer Tax?

Georgia imposes a real estate transfer tax on various instruments that convey real property, such as warranty deeds, quitclaim deeds, and deeds of gift. The tax rate is set at $1.00 for each $1,000 of value, plus an additional $0.10 for each fractional part of $100 of value. For instance, a property valued at $1,000 would incur a $1.00 tax, while a property valued at $1,100 would incur $1.10.

The general responsibility for paying this tax falls upon the grantor, typically the seller of the property. However, the parties involved in a real estate transaction can agree in their sales contract that the buyer will assume this responsibility.

Identifying the Taxable Value

The real estate transfer tax in Georgia is based on the “consideration or value of the interest or property conveyed.” This value is not always simply the stated sale price. It includes the actual cash paid or to be paid, the value of any property exchanged, and the amount of any assumed mortgages or existing liens that are part of the consideration for the transfer.

For example, if a property is sold for cash and the buyer assumes an existing mortgage as part of the purchase, the assumed mortgage amount is added to the cash consideration to determine the total taxable value. However, if a mortgage is merely secured by the property but not assumed by the buyer, it is generally not included. The value of personal property included in the sale can be deducted from the taxable basis.

Exemptions from Transfer Tax

Georgia law provides several exemptions from real estate transfer tax, meaning certain property transfers do not incur this tax. Common exemptions include instruments given to secure a debt, such as security deeds, and deeds of gift where no valuable consideration is exchanged.

Other exemptions include:
Transfers between spouses in connection with a divorce.
Transfers to or from a government entity.
Estate deeds or distributions by fiduciaries, if without valuable consideration.
Transfers from an entity to individuals holding a majority ownership interest.

Calculating the Tax

To calculate the real estate transfer tax, first determine the property’s taxable value. Once established, the tax is computed at a rate of $1.00 per $1,000, plus $0.10 for each additional $100 or fractional part thereof.

For instance, if a property has a taxable value of $250,000, the calculation would proceed as follows: divide the taxable value by $1,000 ($250,000 / $1,000 = 250). Then, multiply this result by $1.00 (250 $1.00 = $250). If the taxable value was $250,500, the additional $500 would be taxed at $0.10 per $100, adding $0.50 to the tax for a total of $250.50.

Reporting and Payment Procedures

The real estate transfer tax in Georgia is generally paid to the Clerk of Superior Court in the county where the property is located. Payment is a prerequisite to filing for record any deed, instrument, or other writing that conveys real property.

A Georgia Real Estate Transfer Tax Declaration form, known as Form PT-61, must accompany the deed or instrument. This form requires information such as the seller’s and buyer’s details, the date of sale, and the consideration or value of the property conveyed. The form must be properly completed and signed by both the seller and the buyer. The Georgia Superior Court Clerks’ Cooperative Authority (GSCCCA) offers an online e-filing system for Form PT-61. Upon payment, the Clerk of Superior Court will certify that the tax has been paid on the deed or instrument.