In accordance with quitclaim deeds laws, the grantor may be required to pay recording fees and certain county, state, and federal taxes.
Recording Fees
Recording fees for Oregon quitclaim deeds and other real estate documents vary by county:
- ORS § 205.320 mandates a per-page fee of $5.00, but most counties charge an additional recording fee.
- The county clerk may collect a penalty of $20 for filing any documents that do not meet formatting requirements under ORS § 205.232 or content requirements under ORS § 205.234.
Taxes
The state does not charge a transfer tax for real estate conveyances. However, Washington County does charge a transfer tax that predates the deadline established under ORS § 306.815.
1. Washington County Transfer Tax
Transfer tax in Washington County was grandfathered into law because it went into effect in 1985. The statute prohibiting real estate transfer fees and taxes specifically excludes laws or ordinances imposing such taxes on or before March 31, 1997.
Who Pays the Transfer Tax?
The cost of transfer taxes for properties conveyed in Washington County is typically shared by the buyer and seller on a 50/50 split. However, the participants may agree to have one or the other party cover the transfer tax in its entirety.
Exemptions to Transfer Tax
Exemptions to Washington County transfer tax include the following:
- Deeds in lieu of foreclosure.
- Transfers by order of a court.
- Transfers of a seller’s interest in a contract.
- Trustee deeds as a result of foreclosure.
- Fulfillment deeds.
- Documents for security purposes.
- Deeds transferring property with consideration below $14,000.
- Transfers for change of identity or place of organization.
- Property transfers to dissolve a corporation, partnership, or joint venture.
- Transfers of property by gift, devise, or inheritance.
- Transfers of property between spouses by court order due to a divorce or marriage separation.
Tax Rates
Transfer tax rates are established under Washington County Code of Ordinances § 3.04.070 at $1.00 per every $1,000 of the selling price or fraction thereof.
2. U.S. Gift Tax (Form 709)
If the property transferred is a gift, the grantor may owe U.S. gift tax. The state does not charge its own gift tax, but the federal government imposes one for gifts valued over a certain amount.
The exemption amount changes annually, so check with the IRS before filing your annual taxes to ensure you pay the correct amount. If you owe taxes as the property grantor, you will be asked to submit Form 709 with your annual income tax return.
3. Capital Gains Tax
In a real estate transaction involving consideration, the grantor who sold the property via quitclaim deed may owe capital gains tax on a state and federal level. Oregon charges capital gains tax at the regular personal income tax rate, which is based on your total income.
If consideration for the real estate is $100,000 or less, you may be exempt from capital gains in the state. Additional exemptions may apply. However, even if you are exempt from state capital gains tax, you may still owe federal taxes for capital gains. These are based on your annual income, how much you earned from the sale, and how long you lived on the transferred property.
