Some transfers exempt from tax

In Nevada, a real estate transfer tax is due upon the recording of most deeds transferring real estate between parties for a payment, called consideration, of at least $100. This tax is assessed at a statutory rate, but counties may impose an additional transfer tax. The county recorder in the county where the property is located is the agency responsible for the imposition and collection of the transfer tax at the time the transfer is recorded.

However, Nevada statute includes several categories of transfers that are exempt from the payment of a transfer tax.

Deeds transferring title to state and federal governmental agencies are exempt from the transfer tax as well as transfer deeds to an educational institution or a university foundation.

Deeds intended to show only a change in identity, form, or place of an organization, such as deeds between affiliated businesses with identical common ownership, are exempt from the transfer tax. Similarly, deeds transferring title to recognize the real property’s true ownership status are also exempt from the transfer tax.

Transfer deeds from one co-owner to another, such as transfers between joint tenants and tenants in common, as long as they are without consideration (payment), are exempt from the transfer tax. Similarly, deeds conveying title to a close family member, thus between persons related within the first degree of lineal consanguinity or affinity, are exempt from the transfer tax, along with transfer deeds to a business entity if the grantor owns 100% of the organization to which the conveyance is made.

A transfer of title between former spouses in compliance with a divorce decree, deeds transferring title pursuant to a plan of reorganization in a bankruptcy or receivership, and transfer deeds necessary to make effective an order of the Securities and Exchange Commission are also exempt from the transfer tax. A divorce decree or a copy of an order should be included with the deed to claim the exemption.

A deed upon death, thus a conveyance of real property by deed which becomes effective upon the death of the grantor, is also exempt from the transfer tax.

In estate planning, a very important exemption includes a transfer of title to or from a trust if the transfer is without consideration. In order to claim this exemption, a Certificate of Trust must be present at the time of the transfer and recording. The Certificate of Trust will not be recorded but should be presented to the county recorder at the time the recording is requested.

The Declaration of Value is a form that must accompany the transfer deed. This form provides information regarding the real property being transferred and the information provided is used to calculate the transfer tax.

At the time of the transfer deed recording, the County Recorder’s office reviews applications for exemptions and decides whether the exemption is applicable and accepted. If the tax is due, it is collected when the transfer of real property is recorded and then the payment is transmitted to the State of Nevada. Both the grantor and grantee are jointly and severally liable for the payment of the tax.