How is the transfer tax for a property typically computed?

Transfer tax for a property is primarily computed based on the sale price. This tax is typically a percentage of the total consideration paid by the buyer for the property and is generally assessed at the time of sale or transfer of ownership. The logic behind this method of calculation is that the sale price reflects the market value of the property, providing a fair basis for taxation in relation to the transaction.

Other factors like the down payment, loan amount, or property type may influence other financial aspects of a real estate transaction, but they do not typically play a role in calculating transfer taxes. Focusing solely on the sale price ensures that the transfer tax is equitable and directly tied to the actual market transaction taking place.