What does ‘no consideration’ deed mean?
When someone says “no consideration” deed, what does it mean? Does it mean no transfer and recordation taxes?
No. It actually means that the property is being transferred via deed without money exchanging hands.
However, not all no consideration deeds are exempt from transfer and recordation taxes.
There are a number of situations where a “no consideration” deed is appropriate, and some of them are as follows:
- Transfer between husband and wife;
- Transfer between individual and a revocable trust;
- Transfer between Personal Representative of an Estate and the beneficiaries of the Estate;
- Transfer from individual(s) into an LLC;
- Transfer from LLC into individuals;
- Transfer from parents to children;
- Transfer from children to parents;
- Transfers pursuant to a divorce decree or settlement agreement;
- Transfer pursuant to a termination of a domestic partnership;
- Transfer between domestic partners;
- Inter-familial transfers i.e. grandparents to grandchildren or sisters to brothers, etc; and
- Transfer pursuant to a termination of a Partnership or Corporation.
This just gives an idea of situations when a “no consideration” deed may be used in DC, Maryland or Virginia. It is very important to check your local jurisdiction to see if there are any transfer and/or recordation taxes if you choose to do this type of transfer.
In cases where transfer/recordation taxes are likely, the tax assessment for the property is typically used to determine the amount of taxes owed.
It is really important to consider all of the factors and talk to a professional when you are deciding how your property is going to be transferred.
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deed, Deed Transfers, recordation taxes, taxes, transfer, transfer taxes
Mayra Lemus
I would to know if we can refinance a house that our father inherited to my sister, my brother and myself. He transferred the property to us trough a no consideration deed.
We would like to lower the interest rate.
webmaster
Thanks for your question, Mayra. The answer is yes, you should be able to refinance. But you will want to contact a lender to get the specifics.
Dennis Walters
I am doing a reverse mortgage on a borrower, but there is a problem. His mother gave him the house, but at the time his was married so the mother put a deed of trust on the property just in case they got divorced the wife wouldn’t get the house. No money exchanged hands whatsoever, but now the mother has alzheimer’s disease. What can I do?