If you want to convey property in Indiana using a quitclaim deed, explore the various filing fees and other costs to familiarize yourself with the expenses of this process.
Filing Fees
Indiana counties impose their own filing fees, which may cost between $25 and $35. For example, St. Joseph County and Hamilton County charge $25.00 filing fees. In cases where you need a sales disclosure, you can expect to pay an additional cost, usually around $20.
Taxes
1. Real Estate Transfer Tax
Indiana, unlike most other states, does not have a property transfer tax.
2. US Gift Tax
The IRS gift tax applies when one party gives a financial gift exceeding a certain value to another (for the 2024 tax year, the grantor must pay gift tax on any value exceeding $18,000). If the transferred property is a gift the grantor gives without expecting equal value in return, the grantor will pay the gift tax. However, the parties may agree for the grantee to pay the gift tax if they both consent.
The gift tax may also apply when a grantor transfers property for significantly less than its actual value. For example, a grantor may decide to sell a property to a family member for a much lower cost than its assessed value. For example, if the grantee paid $300,000 for a $500,000 property, the gift tax would be assessed on the additional $200,000.
3. Capital Gains Tax
Indiana charges a 3.05% capital gains tax regardless of the property’s value. It’s the same flat rate as the state’s ordinary income tax. The federal government also imposes an additional capital gains tax, which the IRS describes in Topic No. 409. The IRS assesses a capital gains tax on the sale of assets when the sale price is significantly more than the asset’s original purchase price.
Because real estate often appreciates substantially in value over the years, many parties will have to pay capital gains tax. However, the IRS allows some exemptions to the capital gains tax, including cases where the property was the owner’s primary residence for at least two out of the last five years. Furthermore, it may make exceptions for individuals in the Uniformed Services.
