Ohio Real Estate Transfer Tax Exemptions
Most states, including the State of Ohio, impose taxes or fees when real estate is conveyed or transferred. These are technically considered real estate conveyance fees in the State of Ohio but can cost property owners in Ohio millions of dollars per year. Ohio’s real property conveyance fee is paid whenever parties make a sale of real estate or used manufactured homes (unless exempt). This amount is based on the value of the property at the time of transfer. If you are transferring real estate in Ohio, chances are you at least need to diligently consider the conveyance fee implications. This includes the proper calculation and remittance of the fee or an analysis on whether or not the real estate transfer is exempt from the fee in Ohio.
Ohio Real Estate Conveyance Fees
As far as the exact amount in your particular circumstance, please contact us so we can complete a calculation. For ballpark estimates, here’s the State of Ohio’s explanation of how the calculation should work. The conveyance fee consists of two parts:
- A statewide mandatory tax of $1.00 per $1,000 dollars of the value of property sold or transferred applies in all 88 of Ohio’s counties.
- In addition to the statewide mandatory tax, counties may also impose a permissive real property transfer tax of up to $3.00 per $1,000 dollars of the value of property sold or transferred. Depending on the county where the real estate involved in your transfer is located, Ohio’s real estate transfer tax could potentially increase from the baseline $1 per $1,000 dollars of the value sold. This would require an analysis of any local county property transfer tax implications so without knowing the local county, its tough to know the full amount of the potential tax exposure.
Ohio Transfer Fee Exemptions
There are, however, some transactions that are exempt from the real estate transfer tax in Ohio. Ohio law provides twenty-five types of real estate transfers that are exempt from this conveyance fee in Ohio. Please note that we’ve made every update to keep this information current but laws in Ohio change frequently. We encourage you to call our offices so we can review your transaction and do proper due diligence in determining any applicable tax consequences. These transfers are transfers:
- To or from the United States, this state, or any instrumentality, agency, or political subdivision of the United States or this state;
- Solely in order to provide or release security for a debt or obligation;
- To confirm or correct a deed previously executed and recorded;
- To evidence a gift, in trust or otherwise and whether revocable or irrevocable, between husband and wife, or parent and child or the spouse of either;
- On sale for delinquent taxes or assessments;
- Pursuant to court order, to the extent that such transfer is not the result of a sale effected or completed pursuant to such order;
- Pursuant to a reorganization of corporations or unincorporated associations or pursuant to the dissolution of a corporation, to the extent that the corporation conveys the property to a stockholder as a distribution in kind of the corporation’s assets in exchange for the stockholder’s shares in the dissolved corporation;
- By a subsidiary corporation to its parent corporation for no consideration, nominal consideration, or in sole consideration of the cancellation or surrender of the subsidiary’s stock;
- By lease, whether or not it extends to mineral or mineral rights, unless the lease is for a term of years renewable forever;
- When the value of the real property or the manufactured or mobile home or the value of the interest that is conveyed does not exceed one hundred dollars;
- Of an occupied residential property, including a manufactured or mobile home, being transferred to the builder of a new residence or to the dealer of a new manufactured or mobile home when the former residence is traded as part of the consideration for the new residence or new manufactured or mobile home;
- To a grantee other than a dealer in real property or in manufactured or mobile homes, solely for the purpose of, and as a step in, the prompt sale of the real property or manufactured or mobile home to others;
- To or from a person when no money or other valuable and tangible consideration readily convertible into money is paid or to be paid for the real estate or manufactured or mobile home and the transaction is not a gift;
- Pursuant to division (B) of section 317.22 of the Revised Code, or to section 2113.61 of the Revised Code, between spouses or to a surviving spouse pursuant to section 5302.17 of the Revised Code as it existed prior to April 4, 1985, between persons pursuant to section 5302.17 or section 5302.18 of the Revised Code on or after April 4, 1985, to a person who is a surviving, survivorship tenant pursuant to section 5302.17 of the Revised Code on or after April 4, 1985, or pursuant to section 5309.45 of the Revised Code;
- To a trustee acting on behalf of minor children of the deceased;
- Of an easement or right-of-way when the value of the interest conveyed does not exceed one thousand dollars;
- Of property sold to a surviving spouse pursuant to section 2106.16 of the Revised Code;
- To or from an organization exempt from federal income taxation under section 501(c)(3) of the “Internal Revenue Code of 1986,” 100 Stat. 2085, 26 U.S.C.A. 1, as amended, provided such transfer is without consideration and is in furtherance of the charitable or public purposes of such organization;
- Among the heirs at law or devisees, including a surviving spouse, of a common decedent, when no consideration in money is paid or to be paid for the real property or manufactured or mobile home;
- To a trustee of a trust, when the grantor of the trust has reserved an unlimited power to revoke the trust;
- To the grantor of a trust by a trustee of the trust, when the transfer is made to the grantor pursuant to the exercise of the grantor’s power to revoke the trust or to withdraw trust assets;
- To the beneficiaries of a trust if the fee was paid on the transfer from the grantor of the trust to the trustee or if the transfer is made pursuant to trust provisions which became irrevocable at the death of the grantor;
- To a corporation for incorporation into a sports facility constructed pursuant to section 307.696 of the Revised Code;
- Between persons pursuant to section 5302.18 of the Revised Code.
- From a county land reutilization corporation organized under Chapter 1724 of the Revised Code to a third party.
As you can see, there are a lot of moving pieces so it is always best to contact a qualified real estate attorney to thoroughly review the transfer. In addition to the legal basis for the exemption, there may be various filings required. The need for legal representation is especially important if the value of the transfer grows larger (given that would result in a larger tax liability). If you think you might qualify for one of these exemptions, give our team of Ohio real estate attorneys a call today at 419-469-5002. We can help to analyze and compile evidence regarding your claim and complete the necessary paperwork to effectuate the exemption with Ohio’s taxing authorities.
Chris Sawan holds a JD, MBA and is a CPA with a background that yields itself to some of the most complex legal challenges facing businesses, families, and individuals.
Dennis E. Sawan is licensed to practice law in the States of Florida and Ohio. His experience as a transactional attorney makes him a tremendous ally to have for all types of transactions.
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