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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Easy to arrive at sales price from a partial transfer tax. Posted by Ward-CA- on February 19, 2002 at 6:54 AM In Reply to: Definition of Documentary Transfer Tax posted by Gary C. on February 19, 2002 at 6:15 AM : Ward: : From the glossary on this website: : DOCUMENTARY TRANSFER TAX: A local tax levied on recorded transfers of title to real property. Our local (Southern California) tax rate is $.55 cents per $500 (or fraction thereof) of owner's equity transferred. The tax declaration is generally found on the face of the deed. : Question: If the DTT is based on the owner's equity transferred, and usually when one sells his property, it is not free and clear (i.e., the equity is a fraction of the selling price), how can you tell the selling price of the house from the DTT? : Gary C. =•=•=•=•=•=•=•=•=•=•= Gary, the partial transfer tax paid, divided by the tax rate, would tell the amount of equity transferred. To that you’d add the unpaid balance of the trust deed(s) or mortgage(s) that were assumed or taken “subject to” at the time of the sale and you’d have a very close approximation of the sales price of the property. It is relatively easy to determine the unpaid balances of existing mortgages if you have an amortizing calculator such as an HP-12C and a chart of past home mortgage rates, such as we have assembled for our web site visitors. If the assumed loan is a first you can safely assume it was set up for 30 years and you could get your Present Value component from the loan amount stated on the recorded trust deed. Once you’ve computed the amount of the monthly payment you could enter the number of months it’s been since the trust deed has been recorded and with that, figure out the current unpaid balance by solving for the Future Value component. By the way, it seems to me that when one sells their property it usually is done with the new buyer getting their own financing, thus paying off the seller’s existing loan so that at the exact time of title transfer the property is truly “free and clear”. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward: : : From the glossary on this website: : : DOCUMENTARY TRANSFER TAX: A local tax levied on recorded transfers of title to real property. Our local (Southern California) tax rate is $.55 cents per $500 (or fraction thereof) of owner's equity transferred. The tax declaration is generally found on the face of the deed. : : Question: If the DTT is based on the owner's equity transferred, and usually when one sells his property, it is not free and clear (i.e., the equity is a fraction of the selling price), how can you tell the selling price of the house from the DTT? : : Gary C. : =•=•=•=•=•=•=•=•=•=•= : Gary, the partial transfer tax paid, divided by the tax rate, would tell the amount of equity transferred. To that you’d add the unpaid balance of the trust deed(s) or mortgage(s) that were assumed or taken “subject to” at the time of the sale and you’d have a very close approximation of the sales price of the property. : It is relatively easy to determine the unpaid balances of existing mortgages if you have an amortizing calculator such as an HP-12C and a chart of past home mortgage rates, such as we have assembled for our web site visitors. : If the assumed loan is a first you can safely assume it was set up for 30 years and you could get your Present Value component from the loan amount stated on the recorded trust deed. Once you’ve computed the amount of the monthly payment you could enter the number of months it’s been since the trust deed has been recorded and with that, figure out the current unpaid balance by solving for the Future Value component. : By the way, it seems to me that when one sells their property it usually is done with the new buyer getting their own financing, thus paying off the seller’s existing loan so that at the exact time of title transfer the property is truly “free and clear”. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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