Real estate transfer tax is one of the few closing costs that most buyers and sellers never think to negotiate, because in most states it isn’t optional — it’s a percentage of price owed to the state or county simply for recording the deed. Of the 17 states this calculator covers in detail, two charge none at all: Texas and Arizona.
Texas: no transfer tax, just a recording fee
Texas charges no state or local transfer tax on a deed. Closing costs there are driven almost entirely by title insurance (which follows a state-filed rate schedule) and lender fees, plus a flat recording fee. The tradeoff, common in no-income-tax states, is a higher recurring property tax — Texas’s effective rate runs well above the national average, funding cities, counties and school districts that have no income tax to draw on instead.
Arizona: an affidavit fee, not a tax
Arizona goes even further — there isn’t a percentage-based transfer tax at all, just a small flat affidavit fee (a few dollars) recorded with the deed. Arizona also caps annual property-tax assessment growth at 5% and assesses residential property at only 10% of its Limited Property Value, which keeps its effective property tax rate among the lowest of the states this calculator covers.
In real dollars
On a $400,000 disposition, a 0.70% seller-paid transfer tax (roughly Florida’s rate) costs about $2,800. In Texas or Arizona, that line is zero — money that goes straight back into your target profit margin instead of a state treasury.
Why this matters more for flips than for buy-and-hold
Transfer tax is usually a one-time cost paid at the closing table, not a recurring one — so it matters most to strategies with a short hold and a resale, like a flip or a BRRRR refinance-and-hold. A buy-and-hold investor planning to own for a decade will feel Texas’s higher recurring property tax far more than they’d ever feel a one-time transfer tax elsewhere.