Who is typically responsible for paying the state deed tax in a real estate transaction?

In a real estate transaction, the seller is typically responsible for paying the state deed tax. This tax is calculated based on the purchase price of the property and is a one-time payment that helps fund various state and local programs. It is important for sellers to account for this tax when calculating their net proceeds from the sale.

The deed tax is usually included in the closing costs, and it is a standard practice for the seller to cover this expense; however, the agreement between the buyer and seller can sometimes alter who pays this tax. Customarily, though, it falls on the seller, aligning with common practices in many states, including Minnesota. This understanding is crucial for real estate professionals when counseling their clients about financial obligations in a transaction.