Posted on: 05th Dec, 2006 07:08 pm
3 1/2 yrs ago we had to sell our home and downsize due to my husbands unemployment. We could not get a loan on our own and had our father-in-law co-sign for us. His name is on the title of our home.
We are refinancing on our own and removing his name from the title. He has no interest in the home and doesnt live here or have anything to do with the home.
I've been told he needs to fill out a quick claim deed and will also have to fill out an excise tax form. Does that sound right? He is going to have to pay 1.78% of half of the loan amount owing?? Will this effect his taxes at the end of year or our taxes?
Again, he has no interest in the house and has nothing to do with it. He only co-signed for the loan.
Any help would be great.
We are refinancing on our own and removing his name from the title. He has no interest in the home and doesnt live here or have anything to do with the home.
I've been told he needs to fill out a quick claim deed and will also have to fill out an excise tax form. Does that sound right? He is going to have to pay 1.78% of half of the loan amount owing?? Will this effect his taxes at the end of year or our taxes?
Again, he has no interest in the house and has nothing to do with it. He only co-signed for the loan.
Any help would be great.
hi guest,
as you are refinancing the loan and removing your father-in-law's name from the title, so he needs to sign the quit claim just to make the property-transfer to you effective.
regarding the excise tax, if there is a mortgage debt on the property at the time of title transfer and the person getting the property assumes the debt, then such taxes are to be paid on the loan balance.
however, if a property is totally debt-free and the title is transferred, then no real estate excise tax is due. in other words, if a person transfers the title to someone else but he himself maintains the responsibility of making home loan payments, then the latter will not incur any debt and will not have to pay excise tax.
in your situation, since you wish to refinance to remove your father-in-law's name from title, and he already has signed on the loan as co-signer, so he need not pay excise taxes.
thanks
as you are refinancing the loan and removing your father-in-law's name from the title, so he needs to sign the quit claim just to make the property-transfer to you effective.
regarding the excise tax, if there is a mortgage debt on the property at the time of title transfer and the person getting the property assumes the debt, then such taxes are to be paid on the loan balance.
however, if a property is totally debt-free and the title is transferred, then no real estate excise tax is due. in other words, if a person transfers the title to someone else but he himself maintains the responsibility of making home loan payments, then the latter will not incur any debt and will not have to pay excise tax.
in your situation, since you wish to refinance to remove your father-in-law's name from title, and he already has signed on the loan as co-signer, so he need not pay excise taxes.
thanks
Thank you for your response. The home is not paid for. So I'm assuming he would have to pay the excise tax? I don't understand your last paragraph.
Thanks.
Thanks.
Hi Guest,
Whether a person has to pay real estate excise tax or not, depends on the tax laws of the state where his property is situated. In certain cases, one may have to pay the tax whereas in some other cases, the person transferring the property may not have to pay it. By the way, where did you get the information from? If your attorney is saying so, well then, he will be doing so in accordance with the state laws as he is very well aware of it.
There are also certain criteria under which the excise taxes are paid or one can seek exemptions. So, if you can give some more details about the transfer, then perhaps I can give you a better advice on this issue.
Thanks,
Sara
Whether a person has to pay real estate excise tax or not, depends on the tax laws of the state where his property is situated. In certain cases, one may have to pay the tax whereas in some other cases, the person transferring the property may not have to pay it. By the way, where did you get the information from? If your attorney is saying so, well then, he will be doing so in accordance with the state laws as he is very well aware of it.
There are also certain criteria under which the excise taxes are paid or one can seek exemptions. So, if you can give some more details about the transfer, then perhaps I can give you a better advice on this issue.
Thanks,
Sara
Hi Guest,
Welcome to the forums.
You have mentioned that your father-in-law has no interest in the property; but legally he has certain percentage of interest in it as long as his name is on the title. He may have verbally shown his disinterest in the property but legally he has the right to claim it till he transfers his share of interest to you and your husband.
Regarding the excise tax on the transfer of property, it is paid in most cases except under certain circumstances when one can seek exemptions. The information given by helping_user is correct though the non-payment of excise taxes is applicable only if the transferor gets back the property 6 months after recording the deed.
In your situation, I don't think you wish to revert the property back to your father-in-law after 6 months; hence, your father-in-law has to pay the excise taxes. However, laws on excise taxes vary from state to state, so if you can let me know more about the transfer, then I can try to give you a better idea.
I hope this information will be helping you.
God bless you.
Samantha
Welcome to the forums.
You have mentioned that your father-in-law has no interest in the property; but legally he has certain percentage of interest in it as long as his name is on the title. He may have verbally shown his disinterest in the property but legally he has the right to claim it till he transfers his share of interest to you and your husband.
Regarding the excise tax on the transfer of property, it is paid in most cases except under certain circumstances when one can seek exemptions. The information given by helping_user is correct though the non-payment of excise taxes is applicable only if the transferor gets back the property 6 months after recording the deed.
In your situation, I don't think you wish to revert the property back to your father-in-law after 6 months; hence, your father-in-law has to pay the excise taxes. However, laws on excise taxes vary from state to state, so if you can let me know more about the transfer, then I can try to give you a better idea.
I hope this information will be helping you.
God bless you.
Samantha
