Ever get to the closing table and learn there is a tax no one planned to pay? In Georgia, that surprise is often the state transfer tax. You want a smooth closing with no last-minute credits or escrow holds. In this guide, you will learn who pays by default, how contracts shift that cost, and the exact language you can use to avoid delays. Let’s dive in.
What is Georgia’s transfer tax?
Georgia’s real estate transfer tax is a state tax on the conveyance of property. You may also hear it called a documentary stamp tax, deed tax, or stamp fee. It is different from recording fees. Recording fees pay the county to index and record the deed, while the transfer tax is a tax on the transfer itself.
Why it matters: title companies and closing attorneys must collect the tax before they can record the deed. If no one has budgeted for it or the contract is unclear, you can face last-minute friction and potential delays.
Who pays by default in Georgia?
Under Georgia law, the seller is the party responsible for the transfer tax by default. That is the statutory baseline used when a contract is silent. If there is confusion, closing attorneys often follow the statute and local custom.
The good news is that you can allocate this cost differently in your purchase agreement. If you prefer the buyer to pay or you want to split or cap the cost, write it clearly in the contract.
Put it in the contract
Contracts can override the statutory default. Many Georgia purchase agreements shift the transfer tax to the buyer for competitive reasons, but it must be stated in writing. Vague references to “closing costs” are not enough. Use precise language that names transfer taxes, documentary stamps, and recording fees so the closing attorney knows which line items to collect from whom.
Clear model clauses you can use
Edit these to fit your form and confirm with your closing attorney or title company.
Seller pays (reaffirm the default):
“Seller shall pay all state and local transfer taxes, documentary stamp taxes, and recording charges required to transfer title to Buyer.”
Buyer pays (shift to buyer):
“Buyer shall pay the state and local transfer taxes (documentary stamps) associated with the conveyance of the Property and shall provide funds for those taxes at Closing.”
Split allocation:
“Seller shall pay transfer taxes up to $_____ and Buyer shall pay any transfer taxes in excess of that amount. All recording fees shall be paid by Buyer.”
Cap on seller liability:
“Seller’s liability for transfer taxes shall not exceed $_____. Any amount in excess shall be paid by Buyer.”
Reimbursement or credit:
“If Seller pays any transfer taxes required by law, Buyer shall reimburse Seller at Closing by (a) delivering funds, or (b) receiving an equivalent credit on the Closing Statement.”
Evidence of payment:
“The party responsible for payment of transfer taxes shall provide proof of payment or receipt for recording to the Closing Attorney/Title Company prior to recordation.”
Pro tip: match the wording your local contract and closing agent use. If your settlement statement lists “documentary stamps,” use that term in the clause so everyone is aligned.
How it shows up at closing
The transfer tax usually appears as its own line on the closing statement or Closing Disclosure. It is separate from county recording fees. The closing attorney or title company will collect funds from the responsible party before recording the deed.
If your contract is silent, expect title counsel to follow the statutory default, which places liability on the seller. If your contract assigns the tax to the buyer, the buyer will need to bring sufficient funds to cover the tax at closing.
Common Georgia scenarios
Standard sale with buyer paying: The contract clearly states the buyer pays documentary stamps. The title company collects from the buyer and records the deed after funds are verified. No delays.
Seller expects buyer to pay, but contract is silent: Expect friction at the table. The statutory default still places liability on the seller. You would need a written amendment to change allocation.
Split or capped arrangement: The parties agree the seller pays up to a set amount and the buyer covers any excess. This can balance negotiation leverage and provide predictability.
Special transfers and exemptions: Some transfers, like certain exchanges or transfers to government entities, may be exempt. Eligibility is fact specific. Confirm early with your closing attorney or title company.
Local practice matters
Georgia has one statewide rule, but local customs can shape expectations. In the Athens and Oconee County markets, closing attorneys and title companies focus on the written contract first and local practice second. That means clarity in your contract will carry the day. If you are buying or selling in a different Georgia county, ask your closing agent how they typically itemize and collect transfer taxes, and plan accordingly.
Practical checklist to avoid delays
- Decide early: Agree on who pays the transfer tax during negotiations and write it into the purchase contract.
- Name the costs: Specify transfer taxes, documentary stamps, and recording fees separately to prevent confusion.
- Confirm with closing: Ask your closing attorney or title company how the tax will be shown on the settlement statement and who must bring funds.
- Build it into funds: If you are the buyer and responsible for the tax, include the amount in your wired funds for closing.
- Consider caps or splits: If you want predictability, use a dollar cap or a split allocation in the contract.
- Check exemptions: If you think your transfer might be exempt, ask title counsel to confirm well before closing.
- Review early: Request a preliminary closing statement a few days before closing to confirm the line item and payer.
Lenders and the transfer tax
Most lenders do not dictate who pays the transfer tax. They require proof that all required taxes and fees are paid so the deed can be recorded and their loan secured. The allocation is a contract point between buyer and seller, so keep your lender informed if it affects your cash to close.
Key takeaways
- The legal default in Georgia places transfer tax liability on the seller.
- Your contract can reassign the cost to the buyer, split it, or cap it.
- Clear, specific language prevents closing delays and last-minute credits.
- Confirm details with your closing attorney or title company and review the settlement statement early.
If you want senior-level guidance on cost allocation and a clean, on-time closing, our team is here to help. Schedule a personalized market consultation with Jennifer Westmoreland & Associates to review your goals and next steps.
FAQs
In Georgia real estate, who pays the transfer tax if the contract is silent?
- The statutory default places the liability on the seller, and closing attorneys often follow that rule.
Can a Georgia buyer be required by contract to pay the transfer tax?
- Yes. The purchase agreement can assign the transfer tax to the buyer, which is common in many transactions.
Is the transfer tax the same as county recording fees in Georgia?
- No. Transfer tax is a tax on the conveyance, while recording fees are administrative charges for indexing and recording documents.
Will the transfer tax appear on my Closing Disclosure in Georgia?
- Yes. It is typically a separate line item that must be paid before the deed is recorded.
Are there Georgia transfer tax exemptions for certain transactions?
- Yes. Some transfers may be exempt, but eligibility depends on specific facts and statutes. Confirm with your closing attorney or title company.
What happens if the seller refuses to pay the transfer tax at closing in Georgia?
- If the contract requires the seller to pay, the buyer may seek remedies under the agreement. Practically, parties often resolve it with an escrow hold or negotiated credit so recording can proceed.
