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Selling tax stamp?

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Leslie
(@Leslie)
Advanced Member

After using the search engine I couldnt find the answer to my question so Im going to try my luck here. Could someone tell me what it means when a St.J home seller says "they will help pay a tax stamp?" Im confused by what this means. Thanks

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Topic starter Posted : February 4, 2011 5:33 pm
Ericw
(@Ericw)
Advanced Member

Google is your friend

USVI TRANSFER TAX (Stamp Tax): There is a sliding scale government transfer tax (stamp tax) on residences and land at closing and is based on the purchase price.
A.) 2% for property valued up to $350,000
B.) 2.5% for property valued from $350,001 to $1,000,000
C.) 3% for property valued from $1,000,001 to $5,000,000
D.) 3.5% for property valued over $5,000,001

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Posted : February 4, 2011 8:00 pm
piaa
 piaa
(@piaa)
Trusted Member

Exactly 🙂

Pia

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Posted : February 5, 2011 2:05 am
Captain Jay
(@Captain_Jay)
Advanced Member

Google is your friend

USVI TRANSFER TAX (Stamp Tax): There is a sliding scale government transfer tax (stamp tax) on residences and land at closing and is based on the purchase price.
A.) 2% for property valued up to $350,000
B.) 2.5% for property valued from $350,001 to $1,000,000
C.) 3% for property valued from $1,000,001 to $5,000,000
D.) 3.5% for property valued over $5,000,001

Duty free my ARSE, don't get me started about the "gross receipts" taxes. My political science professor in college said that if you don't like what something is call it something else. Sales tax is a sales tax. Just one more barrier to home ownership.
Jay

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Posted : February 5, 2011 12:44 pm
Leslie
(@Leslie)
Advanced Member

Great, thank you. 1 more question. During a transfer of ownerhip is there anything else other that a Stamp Tax and or insurance is there due at closing for a VI home? Is it any different that the states home closing process?

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Topic starter Posted : February 5, 2011 2:03 pm
Hiya!
(@Hiya!)
Trusted Member

Unless you are a first time buyer you will have to put at least 10 percent down. We do not have many companies that offer mortgages down here. So we have not experienced the foreclosures here that stateside has. But the market is slumped here as well so they may be asking for more down now, I don't know. And unless you are handy you really really need to set money aside each month for repairs and maintenance. Also you are generally not going to be able to get the deals here that you would stateside. If you offer people 15, 20 or 30 percent less you may well get shut down very quickly. People that own here generally don't have to sell, with the exception usually being statesiders that hate it here or are getting a job transfer.

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Posted : February 5, 2011 3:08 pm
Leslie
(@Leslie)
Advanced Member

Unless you are a first time buyer you will have to put at least 10 percent down. We do not have many companies that offer mortgages down here. So we have not experienced the foreclosures here that stateside has. But the market is slumped here as well so they may be asking for more down now, I don't know. And unless you are handy you really really need to set money aside each month for repairs and maintenance. Also you are generally not going to be able to get the deals here that you would stateside. If you offer people 15, 20 or 30 percent less you may well get shut down very quickly. People that own here generally don't have to sell, with the exception usually being statesiders that hate it here or are getting a job transfer.

Thank you for the information. I should of stated we will not be needing a mortgage when we buy. Just curious as to what would be considered extras needing at a VI closing. I have looked at the MLS and see how some homes have been already price reduced so I guess to try to offer much less would be a insult. Cant wait to visit and start home shopping should I say. Just don't want any surprises so I'm doing my homework now. Thanks again for all the good info.

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Topic starter Posted : February 5, 2011 6:58 pm
NugBlazer
(@NugBlazer)
Advanced Member

It's always been my understanding that typically the SELLER, not the buyer, pays the tax stamp. Am I wrong?

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Posted : February 5, 2011 10:36 pm
Exit Zero
(@exit-zero)
Trusted Member Registered

Most deals I have seen go down - admittedly before the slump-- the stamp tax is split.
You do not need insurance to close unless you have a mortgage that requires it.

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Posted : February 6, 2011 3:06 am
Lizard
(@Lizard)
Trusted Member

Seller Pays the Tax Stamp!

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Posted : February 6, 2011 5:53 am
piaa
 piaa
(@piaa)
Trusted Member

Not anymore Lizard. When we purchased 8 years ago I know that was the case (and still is on a Timeshare sale) but now it is almost always listed as a "split" or even buyer to pay Stamp Tax but as everything it can be negotiated in the offer.

The process is pretty much the same as the States - things to keep in mind are survey costs, inspections costs, title insurance costs, attorney fees and the normal misc fee for filing deeds etc.

Pia

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Posted : February 6, 2011 11:48 am
Lizard
(@Lizard)
Trusted Member

piaa
It is the responsibility of the seller for the tax stamp to be paid, how the funds collected for payment have no standing.

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Posted : February 6, 2011 1:28 pm
Leslie
(@Leslie)
Advanced Member

Hi Piaa, Just to keep up with all my questions would you be able to have a top of your head costs to what you mentioned such as title search cost, inspection cost,attorney cost, etc? I have a general idea of what they are in our stateside area but no clue of what any of this will costs in the VI'S...Thanks so much

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Topic starter Posted : February 7, 2011 5:08 pm
cayennita
(@cayennita)
Advanced Member

We bought cash but still use a lawyer to protect our investment. One item to consider is the fact that most places have not paid real estate taxes for years. Make sure you know of this and approximately how much it will be. My unit owed back to 2006 and the money was deducted from the sale price during the closing.
Also if you are a senior citizen and or a veteran you qualify for a tax break. After closing and receiving at least one electric bill with your name on it, you can go to the Lt. Governor's office and apply for the rebate.

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Posted : February 7, 2011 10:04 pm
Leslie
(@Leslie)
Advanced Member

Great to know, thanks for the heads up. Didnt realize some were not paying there taxes. Guess it's a sign of the times. Any other experience good or bad to look out for is greatly appreaciated.

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Topic starter Posted : February 8, 2011 11:32 am
Hiya!
(@Hiya!)
Trusted Member

It is not a sign of the times, it's our corrupt inefficient government. To sum up in 2006 they decided to reevaluate everyone's property taxes and of coarse it took them much longer then it should and then when they finally came out with them their were errors, so back they went to reevaluating and repeat and repeat. So 2006 taxes weren't technically due till 2010.

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Posted : February 8, 2011 11:45 am
Leslie
(@Leslie)
Advanced Member

I don't know much on the VI government and what is or not good. Not even sure about any elected persons in any government in the VI. Or if each island has it's own government or just 1 person that over see's them all. I guess I better start reading up.

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Topic starter Posted : February 8, 2011 12:30 pm
bobn
 bobn
(@bobn)
Advanced Member

Can anyone clarify this for me. I'm the buyer and having to pay. However, the lawyer is telling me that it isn't based on the sale price but a tax appraisal that was done the previous year. My luck, the tax appraisal was much higher than my purchase price. Any help would be greatly appreciated.

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Posted : July 6, 2015 7:05 pm
Alana33
(@alana33)
Expert

Stamp tax can be negotiable between buyer and seller.
However, what we are seeing is that the higher amount prevails.
That's even if sales price is lower than property tax values.

It's screwed up a few sales.

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Posted : July 6, 2015 7:44 pm
StCroixBeachBoy
(@StCroixBeachBoy)
Advanced Member

I was the buyer in a transaction back in 2013. I had to pay the tax stamp and it was based on the appraised value that was much higher than the purchase price.

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Posted : July 6, 2015 9:59 pm
Juanita
(@Juanita)
Expert

I was the buyer in a transaction back in 2013. I had to pay the tax stamp and it was based on the appraised value that was much higher than the purchase price.

Something wrong there. Stamp taxes are based on the sales price. It's basically a sales tax.
And, as mentioned a couple of years ago....the stamp tax is the "responsibility" of the seller. You can negotiate who actually pays it, but it is the seller's obligation, not the buyer's. To clarify, if for some reason, the tax didn't actually get paid after closing, the territory would have the right to collect it from the seller, no matter what the contract said. I'm sure they would tell you to pay up and then you take it up with your buyer in a civil suit, or something like that.

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Posted : July 7, 2015 2:42 pm
Alana33
(@alana33)
Expert

Sales contracts stipulate who pays the stamp/transfer tax.
The tax office doesn't care who pays it as long as it's paid at closing.
In the past, the seller paid but sellers now often state on the MLS listing if it will be the responsibility of buyer.
Sometimes it's negotiable, sometimes it's not.
The stamp tax now goes with the highest value, whether that's the sales price or the valuation on the property tax bill.

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Posted : July 7, 2015 3:02 pm
Juanita
(@Juanita)
Expert

Alana, I didn't know that had changed, but isn't the valuation on the tax bill "usually" lower than the selling price, anyway? I took StCroixBeachBoy's post to mean the private appraisal done for the sale....no??

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Posted : July 7, 2015 3:19 pm
TommySTX
(@TommySTX)
Advanced Member

Just bought a property on STX. Stamp tax was paid by the seller with no attempt or mention that it was a negotiable fee that could be split or paid by the buyer. The amount of the stamp tax was based on the sales price of the home.

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Posted : July 7, 2015 5:39 pm
Alana33
(@alana33)
Expert

Alana, I didn't know that had changed, but isn't the valuation on the tax bill "usually" lower than the selling price, anyway? I took StCroixBeachBoy's post to mean the private appraisal done for the sale....no??

The property tax bills have come out much higher for many properties especially in STJ but here on STT as well, which is why there have been so many requests by individuals for revaluations on their property tax bills and it's taking forever for the tax office to get them done. I'm still awaiting results for the 2012 and 2013 bill I put in a request for. I had to add the 2014 bill to the list and will probably have to add 2015 which hasn't come out as yet.

It used to be that the bills were lower but that's changed recently, within the last year or so, 2012 - 2013 and tax bills forward since the VI government is using a new system to come up with their values.
Some of the property tax bills I've seen do not reflect reality at all.
Frankly, some of the bills reflect a price much higher than what a property could sell for in the current market. Hence all the appeals.

The government doesn't use the private appraisal but either the sales price or the property tax bill value and whichever of those two is the higher amount.

As mentioned, sometimes seller pays, sometimes buyer pays sometimes it's split between seller and buyer.
It's not written in stone. Just depends on seller.

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Posted : July 7, 2015 6:14 pm
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