MindyB
Expert Alumni

Deductions & credits

No, the transfer tax you paid at closing is generally not deductible as a real estate tax on your income tax return. While property taxes (which are based on the assessed value of your home) are deductible if you itemize, transfer taxes and recording fees are considered "settlement costs." 

 

You should still keep a record of these costs, as they are part of your cost basis. When you sell your home, the basis of the house plus improvements will be deducted from the sales price when computing your gain.

 

See this helpful article to find all the ways you can save money on taxes this year Tax Breaks and Home Ownership