Freehold
Transfer Tax formula
transfer tax = sale price × tax rate (often per $1,000 or $500 of price)
transfer tax = sale price × tax rate (often per $1,000 or $500 of price)
Worked example: Sale price $500,000, transfer tax of $2 per $1,000.
$1,000 transfer tax
Every Freehold question shows why the right answer is right — and cites its source.
Annual property taxes of $2,400 are paid in arrears. If closing occurs exactly at the end of June, what is the seller's share for the six months of ownership?
$1,200 — Monthly taxes are $2,400 ÷ 12 = $200. The seller owned the property for six months, so the seller's prorated share is $200 × 6 = $1,200, credited to the buyer at closing.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
Annual property taxes of $3,600 are paid in arrears. If closing occurs exactly at the end of April, what is the seller's prorated share for the four months of ownership?
$1,200 — Monthly tax is $3,600 ÷ 12 = $300. The seller owned the home for four months, so the seller's share is $300 × 4 = $1,200.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
Annual property taxes of $4,800 are paid in advance for the calendar year. If closing occurs at the end of August, how much does the buyer owe the seller for the remaining four months of the year?
$1,600 — Since taxes were prepaid, the buyer reimburses the seller for the unused portion: $4,800 ÷ 12 = $400 per month × 4 remaining months = $1,600.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
All 14 formulas in one place: Real estate math reference