The real estate transfer tax in New Hampshire has been one of the biggest obstacles to small business owners looking to optimize their tax and legal situation. The tax is imposed on both the buyer and the seller at the rate of $.75 per $100 of the price or consideration for the sale, granting, or transfer.
On June 21, 2016 Governor Hassan signed House Bill 1656, providing great opportunities to owners of real estate. Transfers of real estates will no longer be subject to the real estate transfer tax as long as it meets each of several conditions:
The transfer must involve no consideration,
- The transfer must be a mere “change of organization” such as putting your property in your own name to the name of an LLC.
- The owners of the transferor and the transferee must have identical ownership percentages. So, if I own a property 50/50 with my spouse, i can transfer it to an LLC as long as the LLC is also owned 50/50.
- This is fantiastic news, making it possible to get much greater legal protection for owners of real estate.
Do you own your property outright with no mortgage? Is your real estate owned by the same entity your business is in and you want to separate them? Alternatively, do you have real estate in a separate entity and want it in the same entity as your business?
All of these are examples of situations that should be explored now that the Real Estate Transfer Tax no longer applies.
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