In real estate transactions, who typically must pay the documentary stamp tax?

In real estate transactions, the seller of the property is typically responsible for paying the documentary stamp tax. This tax is levied on the transfer of real estate and is usually calculated based on the sale price of the property. In many states, this tax is a closing cost associated with the sale and is most often negotiated to be paid by the seller as part of the overall transaction costs.

This responsibility aligns with the standard practices in real estate transactions, where sellers often bear certain costs related to the transfer of ownership. The documentary stamp tax is just one of these costs, and understanding who is responsible for such taxes is vital for both sellers and buyers when preparing for a real estate transaction.

While the buyer, mortgage lender, and real estate agent may incur other costs in a transaction, they do not typically have the obligation to pay the documentary stamp tax. The buyer usually pays for other closing costs, such as title insurance and recording fees, while the real estate agent is compensated through commission, which is a separate concern from taxes tied to property transfers.