The Mandatory Transfer Fee
In North Carolina, when real property is conveyed (sold and transferred) via a deed, the seller (grantor) is legally required to pay a state transfer tax, commonly known as Excise Tax or Revenue Stamps. This fee is collected by the Register of Deeds when the deed is recorded. How do you calculate the exact amount of excise tax due on a North Carolina real estate transaction?
The formula is based on the sale price and is mandatory for nearly all property conveyances.
The Excise Tax Formula
The current North Carolina excise tax rate, set by NC General Statute § 105-228.30, is $1.00 for every $500, or fractional part thereof, of the consideration (purchase price).
The tax can be calculated using one of two methods:
| Calculation Method | Formula | Example (Sale Price: $350,001) |
| Method 1: The $1 per $500 Rule | ($500Sales Price)×$1.00 (Rounded up to the next dollar) | $500$350,001=700.002 parts. Since the parts must be rounded up to the nearest whole number, the result is 701 parts. 701×$1.00=$701.00 |
| Method 2: The Shortcut Rule | ($1,000Sales Price)×$2.00 (Rounded up to the next $1,000 increment) | $1,000$350,001=350.001. Rounded up to the next $1,000 increment is $351,000. $1,000$351,000×$2.00=$702.00 |
- The Simplest Method: For ease and accuracy, always divide the sales price by 500 and round the result UP to the next whole number, then multiply by $1.
- Who Pays: The tax is customarily paid by the seller (grantor) and is itemized on the closing disclosure (CD).
- Rounding Rule: Even if the sale price is $350,001 (only $1 over the multiple), the remaining fractional part of $500 still requires the full $1 tax, making the rounding rule essential.
Key Takeaway
The NC Real Estate Excise Tax (Revenue Stamps) is levied at a rate of $1.00 per every $500, or fractional part thereof, of the sales price. The tax is a seller expense and is paid to the Register of Deeds when the deed is recorded to complete the transfer of property.