When New Hampshire real estate is sold in a typical transaction and ownership is transferred to the buyer, the seller has to pay Real Estate Transfer Tax (“RETT”). The buyer also has to pay RETT. If you have sold or bought real estate in New Hampshire, it is likely that you paid RETT. Under Chapter 78-B, $0.75 tax for each $100 of the sales price must be paid by the seller and must be separately paid by the buyer. The amount of money that the buyer pays to the seller is referred to as the “legal consideration.” The Registrar of Deeds for the county where the real estate is located records the total RETT that was paid on a tax stamp. This is then placed on the real estate deed and recorded in that Registry as an official public document.
Generally speaking, when a piece of real estate is transferred into a revocable trust, the owner transfers his or her legal ownership to the trustee. A trustee can be thought of as a manager or caretaker of the property and money that the trust owns. The trustee becomes the new owner of that piece of real estate. The person who is transferring ownership to the trustee, signs and gives the trustee a real estate deed. This deed shows that legal ownership has been transferred to the trustee.
Typically, when a single person or married couple transfers their New Hampshire real estate into their revocable trust, no money or “legal consideration” is involved. With a new real estate deed being signed, ownership passes from the person granting or giving the real estate (the “seller”) to the trustee (the “buyer”). Many times, the trustee (the “buyer”) is the same person as the “seller”. In those cases, that person has two separate roles or sets of responsibilities to carry out.
This is similar to a person who has some money or property, let’s say a big truck. They want to create a new company and charge a fee to haul things for customers. That one person can contribute the money or large truck and the company will own those things. That same person can then have the responsibility to manage the investment of money or the truck.
New Hampshire has been very active in creating progressive trust and estate planning laws. Part of that effort has been the creation of an exception to the RETT. The result is that only the minimum tax of forty dollars ($40.00) should have to be paid. New Hampshire’s trust laws are very favorable. There are very few impediments to transferring your New Hampshire real estate into your revocable trust. Take steps to get your estate plan created today.