Will changing this home’s deed cost us any money?

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Q. My house is in my mother-in-law’s name and it is paid off. We pay all of the bills. She wants to take her name off and put it into my name and my husband’s name. In a general warranty deed, we put the transfer amount as one dollar and notarized then sent to the county clerk. It was sent back and they said that we need to fill out a Seller’s Residency Certification form. Will this cost her money later on? Is there a way to transfer the house without having money exchanged? We cannot afford legal fees.
— Confused

A. There’s often confusion about the proper way to transfer a deed and what consequences you might face.

The Seller’s Residency Certificate addresses whether there should be income tax withheld, or whether an estimated tax payment should be made, in connection with the transfer, said Jason Marx, chair of the Tax & Estate Planning and Elder Law & Special Needs Planning groups at Curcio Mirzaian Sirot in Roseland.

He said because the transfer appears to be a gift, no such withholding or estimated taxes should be required.

But it’s important to note that transfers of real property for consideration of less than $100 should not trigger a realty transfer fee, he said.

“If there is a mortgage encumbering the property, and if you will assume that mortgage obligation, then the amount of the outstanding mortgage balance would be treated as consideration,” Marx said. “However, presuming that there is no mortgage encumbering the property and presuming that the transfer from your mother-in-law to you and your husband is a gift, then there should be no realty transfer fee charged on the transfer.”

When you re-record the deed, you should include, in addition to the Seller’s Residency Certificate, an Affidavit of Consideration, he said.

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This story was originally published on April 26, 2021.

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