Confused by the “transfer tax” line on your closing statement? You are not alone. Understanding this one-time tax helps you budget accurately and negotiate with confidence. In this guide, you will learn what the San Rafael and Marin transfer taxes are, how they are calculated, who typically pays, common exemptions, and how to verify the current numbers before you make a move. Let’s dive in.
Transfer tax basics
A real estate transfer tax is a one-time tax charged when a property changes ownership and the deed is recorded. Cities and counties can each impose a transfer tax, so a San Rafael sale may involve both a City of San Rafael transfer tax and a Marin County documentary transfer tax. The tax is separate from escrow, title, recording fees, and property taxes.
Why it matters: the combined city and county amounts affect your closing costs. If you plan ahead, you can budget correctly and use the tax allocation as a negotiation lever in your contract.
How the tax is calculated
Common structures
- Per-$1,000 structure: The tax is stated as a dollar amount per $1,000 of the sale price. Formula: (Sale price / 1,000) × rate.
- Percentage structure: The tax is stated as a percentage of the sale price. Formula: Sale price × percent.
Many ordinances apply the tax to the full sale price and do not reduce it for assumed mortgages. Always confirm the base used in the applicable ordinance.
When and where you pay
The tax is collected at closing and paid when the deed is recorded. Your title or escrow company typically collects it and remits it to the city and county at recordation. It appears as a line item on your closing statement.
Quick math examples
The following examples use a hypothetical combined rate of $4.20 per $1,000. These are for illustration only. Always verify the current rates before budgeting.
- $750,000 sale: (750,000 / 1,000) × 4.20 = 750 × 4.20 = $3,150 total transfer tax.
- $1,500,000 sale: (1,500,000 / 1,000) × 4.20 = 1,500 × 4.20 = $6,300 total transfer tax.
- $3,000,000 sale: (3,000,000 / 1,000) × 4.20 = 3,000 × 4.20 = $12,600 total transfer tax.
If your area quotes a percentage instead, a 0.42 percent combined rate on $1,500,000 would be $1,500,000 × 0.0042 = $6,300.
Who pays at closing
There are two layers to this question. The law governs how the tax is collected. The purchase contract determines who actually bears the cost. In practice, who pays is a negotiable term.
Local custom in Marin and San Rafael can shift with market conditions. Do not assume a default. Ask your escrow officer and your agent what they are seeing in recent comparable closings, then write the allocation clearly in your contract.
Negotiation levers
- Clear contract language: Specify who pays the city and county transfer taxes. Example phrases: “Seller to pay all transfer taxes” or “Buyer and seller to split transfer taxes equally.”
- Credits and price: If one party prefers not to pay, consider an offsetting seller credit or price adjustment.
- Escrow logistics: Even if the buyer is assigned the cost, escrow may advance payment from the seller’s proceeds for timing reasons and settle it on the closing statement.
Practical budgeting advice
- Run both scenarios. Model your net as if you pay and as if the other party pays.
- Ask your escrow officer for a written estimate that shows the city transfer tax and the county documentary transfer tax for your expected price point.
Exemptions and special cases
Exemptions are specific to the city and county and require documentation. Common categories may include:
- Transfers between spouses
- Certain parent-child transfers
- Transfers into or out of a trust where beneficial ownership does not change
- Transfers pursuant to death or probate
- Foreclosure or trustee’s deed following foreclosure
If you think an exemption might apply, ask your title or escrow company what proof is required, such as affidavits or code citations. The documentation must typically be provided before or at recording.
Some transactions can trigger different treatment, such as new construction, condominium conversions, lot-line adjustments, sale-leasebacks, or transfers of beneficial interests. For these, consult your title officer or escrow team early.
Other fees to expect
Transfer taxes are separate from other closing costs. You may also see:
- Recording fees for deeds and related documents
- Title insurance premiums
- Escrow, notary, and courier fees
- Lender-related recording fees for reconveyances or assignments when financing is involved
Verify current San Rafael and Marin rates
Rates and ordinances can change. Before quoting or relying on a number, confirm the current city and county amounts.
Primary sources to contact
- City of San Rafael: municipal code and the City Finance or City Clerk’s office
- Marin County Recorder or Clerk-Recorder: county documentary transfer tax and recording fee schedule
- Local title or escrow companies active in Marin: they calculate these taxes daily and can provide estimates
- Local MLS professionals: to understand current market custom for who pays
- California Association of Realtors forms and guidance: for standard contract language
Step-by-step checklist
- Before listing or writing an offer, request a closing cost worksheet from escrow that shows the city transfer tax, county documentary transfer tax, and recording fees for your expected price.
- If an exemption may apply, ask for the required affidavits and timing so you can submit documentation on schedule.
- Add the transfer tax estimate to your buyer or seller net sheet and, if you are financing, to your loan estimate planning.
- In the contract, state who pays each transfer tax. Avoid ambiguity.
- After acceptance, confirm that escrow instructions match your agreed allocation and identify how any reimbursements will be handled.
Smart budgeting tips
- Build a cushion. Include transfer taxes in your closing cost reserve so you are not surprised on signing day.
- Price strategy. If you are a seller, align list price and expected credits with your desired net after transfer taxes and fees.
- Offer strategy. If you are a buyer, decide whether offering to pay some or all transfer taxes could strengthen your offer relative to price and terms.
- Keep documentation handy. If you plan to claim an exemption, secure proof early to avoid recording delays.
A clear plan for transfer taxes removes guesswork and helps you negotiate with precision. If you would like a private, local perspective on how to structure your next sale or purchase in San Rafael, connect with Eric Schmitt for guidance rooted in Marin experience.
FAQs
What is the San Rafael real estate transfer tax?
- It is a one-time tax charged when a property changes ownership and the deed is recorded, and it may include both a City of San Rafael tax and a Marin County documentary transfer tax.
How are San Rafael and Marin transfer taxes calculated?
- They are typically calculated either as a dollar amount per $1,000 of the sale price or as a percentage of the sale price, then collected at closing.
Who pays the transfer tax in a San Rafael sale?
- It is negotiable in the purchase contract, and local custom can vary with market conditions, so confirm current practice with your escrow officer and agent.
When is the transfer tax paid in escrow?
- Escrow collects the tax at closing and pays it at recordation, with the charge shown on your closing statement.
Are there exemptions from transfer tax in Marin County?
- Common categories may include spousal transfers, certain parent-child transfers, trust-related transfers with no beneficial change, probate-related transfers, and some foreclosure deeds, subject to documentation.
How do I verify the current rates before I budget?
- Contact the City of San Rafael, the Marin County Recorder, and a local title or escrow company to confirm the current city and county amounts and any required documents for exemptions.
