02 Feb After divorce, is a real estate transfer tax due?

Q. My mom got the house in her divorce. The settlement in court was for her to pay $35,000 to the other person to transfer the ownership deed only to her. Does she have to pay any transfer tax or anything when she gets the deed on her name?
— Trying to help

A. It’s kind of you to try to look out for your other.

Here’s what she needs to consider.

Assuming that the residence your mother received as part of her divorce was titled in joint names with your mother’s spouse, she would need to have prepared and file with the appropriate county clerk’s office the requisite transfer of ownership documents transferring the rights of her and her spouse, jointly, to her, individually, said Jeralyn Lawrence, a family law attorney with Lawrence Law in Watchung.

These documents include, but would not be limited to, an Affidavit of Consideration for Use by Seller, she said.

Within this document, the preparer would provide the basis for which the deed transaction is fully or partially exempt from the Realty Transaction Fee, she said.

“There are more than a dozen eligible exemptions which are typically itemized on the Affidavit of Consideration for Use by Seller,” Lawrence said. “More commonly, a seller may be able to be exempt from the realty transaction if the consideration for the transaction is less than $100, or in circumstances of divorce, if the ownership documents transferring title are recorded within 90 days of the entry of a divorce decree.”

Given these exemption options, Lawrence said, it may be possible for your mother to avoid paying a Realty Transaction Fee when transferring ownership of the residence into her sole name.

She recommends your mom speak with an experienced family law attorney to review her settlement agreement to determine what steps are required to facilitate this transaction, and to work closely with a real estate attorney to draft the appropriate documents transferring ownership, including the Affidavit of Consideration for Use by Seller.

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This story was originally published in February 2024.

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