When filing a quitclaim deed in New Mexico, both the grantor and the grantee should be prepared for fees and tax implications to ensure that they do not face any unnecessary expenses.
Filing Fees
According to N.M. Stat. § 14-8-15, anyone filing a quitclaim deed in New Mexico can expect to pay a $25 fee.
Taxes
There are several taxes to take into account when filing a quitclaim deed in New Mexico.
Documentary Transfer Tax
New Mexico does not have a transfer tax for real estate transactions.
US Gift Tax (Form 709)
The United States Gift Tax is charged when funds or property of significant value are gifted to another party, including a relative. While there are some exemptions to the gift tax, real estate is often of significant enough value to meet gift tax requirements. Review annual exemptions in order to determine what you can expect to pay in gift taxes if a relative or friend gifts you a property.
New Mexico does not assess its own separate gift tax.
Capital Gains Tax
The capital gains tax is a tax paid on money earned when selling real estate or other large property. Real estate frequently appreciates significantly in value over time. When selling the property, the capital gains tax is applied to the additional amount the property sells for when compared to its value at purchase.
Depending on how long the grantor has held the property and how much its value has increased, that change can be significant, resulting in considerable capital gains taxes on the property. An accountant or tax professional can help the grantor assess what the tax burden on the property will look like.
