Practice Of Real Estate And Real Estate Calculations Practice Test

Which party typically pays the conveyance tax when title is transferred?

Buyer Seller Lender Escrow Agent

Correct Answer:

Seller

Explanation:

Conveyance tax, or transfer tax, is a tax assessed on the transfer of title from seller to buyer. The party that typically bears this tax is the seller, since the transfer of property rights originates with the seller and closing practices usually list this cost as a seller’s responsibility. The tax is calculated based on the sale price and is paid when the deed is recorded, usually funded from the seller’s proceeds or as negotiated in the contract. The lender and escrow agent don’t pay this tax—the lender provides financing, and the escrow agent handles closing funds and disbursements as directed.

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