Deed tax
Deed tax is Minnesota's tax on the transfer of real property. It is due when a taxable deed is presented for recording, collected by the county, and mostly remitted to the state.
The rate#
0.0033 of net consideration — 0.33 percent.
Hennepin and Ramsey counties add an Environmental Response Fund tax of 0.0001, taking the effective rate in those two counties to 0.34 percent.
On a $200,000 sale that is $660 statewide, or $680 in Hennepin or Ramsey.
The rates have been unchanged since 1987, which makes this one of the few figures in Minnesota property practice that has not moved in a generation.
The minimum#
Where there is no consideration, or consideration of $3,000 or less, a minimum applies: $1.65, or $1.70 in Hennepin and Ramsey.
That covers gift deeds, nominal transfers between family members, and conveyances correcting a defect.
Net consideration, not price#
The base is net consideration — the price less the value of any lien remaining on the property that the sale does not release.
Where the buyer assumes the seller's existing mortgage, that debt comes out of the base. Where the mortgage is paid off at closing, it does not.
On one- to three-unit residential property, personal property conveyed with the real estate is itself subject to deed tax, as are seller-paid costs — so the taxable figure can exceed what people think of as the price of the house.
Exemptions#
Minn. Stat. 287.04 lists them, and several come up regularly in distressed and family situations.
Decrees of marriage dissolution. Transfers between spouses. Conveyances to federal, state or local government. Certain agricultural mortgages. Low-income housing programme transfers.
Claiming an exemption or the minimum uses the state's DT1 form, and it has to be claimed rather than assumed.
Delinquent taxes come first#
A practical requirement that stops closings.
Under Minn. Stat. 272.12, the county auditor must certify that delinquent property taxes are paid before the recorder can accept the deed for filing.
So a property with unpaid back taxes cannot simply be sold and recorded with the taxes left outstanding. They are cleared at closing, from the seller's proceeds, or the transfer does not record.
For anyone buying property with a tax delinquency history, that certification is the step to confirm early — it converts an abstract concern about back taxes into a specific figure that must be paid before anyone leaves the table.
Where it lands#
Counties collect and retain a small administrative share, remitting the rest to the state general fund. The ERF portion in Hennepin and Ramsey funds local environmental response and remediation.