REALWorld Law

Sale and purchase

Taxation of share deals

Which taxes are relevant/which transaction costs will be incurred when buying real estate via the shares in the owning company (share deal) and how are the transaction costs shared between the buyer and seller?

United States

United States

The answer to this question varies from state to state. State and other local laws of the property in question will determine whether transfer taxes and other taxes are payable in a share deal. Typically, a change in control of an owning company will trigger the payment of city, county and state transfer taxes and also a reassessment of property taxes.

In most instances, the applicable state, or the county in which the property is situated, has established customs for:

  • allocation of escrow fees;
  • title insurance and survey costs; and
  • city, county and state transfer taxes.

The SPA should describe the allocation of those costs between the parties.