DFA Form 725: Arkansas Real Estate Transfer Tax Filing and Exemptions

Arkansas DFA Form 725, the Real Property Transfer Tax Affidavit of Compliance, is the sworn statement a grantee attaches to a deed to show the sale price and the transfer tax paid. A county recorder will not accept a deed for recording without either the completed affidavit and documentary stamps on the deed, or an alternative signed certification on the instrument itself.¹ You can get the form from the Arkansas Department of Finance and Administration or from any county recorder’s office.

What You Fill In

Arkansas Code § 26-60-107 sets the required fields. The form is designed by the Secretary of the Department of Finance and Administration and tracks the statute:²

Grantor’s name and address.
Grantee’s name and address.
Date of transfer, as shown on the deed.
Arkansas county where the property is located.
Full consideration paid for the property. If no tax is due, enter the reason the tax does not apply instead of a dollar figure.
Dollar amount of documentary stamps or symbol value on the face of the deed.

Copy the legal description straight from the deed, word for word. A mismatch between the affidavit and the deed is a common reason recorders reject filings. The grantee or an authorized agent signs. Because the affidavit is sworn, a false statement exposes the signer to penalties for false swearing.²

Calculating the Tax You Enter on the Form

Arkansas taxes real property transfers at a combined rate of $3.30 per $1,000 of consideration. That is a $1.10 base levy on the instrument plus an additional $2.20 paid by the buyer.³ The statute taxes each $1,000 “or fractional part thereof,” so round the price up to the next full $1,000 before you multiply.

A sale at $185,500 is taxed on $186,000, which comes to $613.80. Write both the consideration and the tax amount on the affidavit before you take it to the recorder.

The tax applies only when consideration exceeds $100. A deed for $100 or less, or one with no monetary consideration, owes nothing.³ You still complete the affidavit, but you mark the reason no tax applies rather than entering a dollar amount.

When the Form Shows an Exemption Instead of a Tax Amount

Arkansas Code § 26-60-102 lists twelve categories of transfers that fall outside the tax entirely. The ones most people filing their own deeds encounter are:⁴

Deeds to or from the United States, the State of Arkansas, or their agencies and political subdivisions.
Instruments given only to secure a debt, such as a mortgage or deed of trust, and deeds used to enforce a security interest.
Correction deeds that replace a previously recorded deed on which the full tax was already paid.
Deeds between spouses dividing marital property as part of a divorce.
Deeds conveying land sold for delinquent taxes.
Deeds conveying a leasehold interest only, not the land itself.
Timber deeds granting removal rights for 24 months or less.
Transfers of land between business entities, or between an entity and its owners, as part of an organization, merger, consolidation, or liquidation.
Deeds for a home financed by FHA, VA, or USDA Rural Development with a sale price of $60,000 or less, where the buyer certifies they have not owned a home in the past three years.
Transfer-on-death (beneficiary) deeds recorded under § 18-12-608.

Gifts of real estate are not on the exemption list. A gift deed usually owes no tax anyway because the consideration sits at or below the $100 statutory floor, but the reason you cite on the form is the low consideration, not an exemption.³ Transfers between spouses outside a divorce likewise aren’t on the exemption list, so if real consideration above $100 changes hands, the tax applies.

When an exemption is obvious from the face of the deed, such as a conveyance from the State of Arkansas, the recorder can accept the deed without the affidavit. If there’s any doubt, the recorder will require the affidavit or a separate certification explaining the basis for the exemption.²

Filing the Form With the Deed

You file DFA Form 725 at the county recorder’s office in the county where the property sits, at the same time you present the deed. The recorder accepts the deed on one of two conditions:¹

The deed has the completed affidavit attached, and documentary stamps or a documentary symbol showing full payment of the transfer tax appear on the face of the deed.
The deed itself contains, or has attached, a signed statement from the grantee or agent certifying under penalty of false swearing that the correct documentary stamps or symbol are on the instrument. The grantee’s address must appear clearly on the deed.

Under either option, the stamp or symbol amount has to be visible. A recorder will refuse any instrument where the amount is obscured.¹ You buy the stamps at the recorder’s office when you file.

Expect a recording fee on top of the transfer tax. Counties charge per page: Washington County, for example, charges $15 for the first page and $5 for each additional page.⁵ Call the specific office before you go to confirm the amount.

Photo ID at the Counter

Act 752 added an identification step for in-person recording. The grantor named in the deed, or the person who signed on the grantor’s behalf, has to show a valid government-issued photo ID such as a driver’s license or state ID card. If you mail the deed in, include a photocopy of the ID. The recorder keeps the copy on file under seal.⁶

The ID requirement does not apply when the person presenting the deed is an attorney, a real estate broker or agent, a bank or mortgage company representative, a title insurance agent, or a government official.⁶ In most closings handled by a title company, the title agent files the deed and the buyer never sees this step. If you’re recording a family transfer or a for-sale-by-owner deed yourself, bring your ID or the deed will be turned away.

E-Recording Option

More than 50 Arkansas counties accept deeds and related documents through electronic recording networks, including Pulaski, Benton, Washington, Sebastian, and Garland.⁷ You submit the deed, the affidavit, and payment digitally rather than appearing in person. Before you go that route, confirm with the specific recorder that they accept the affidavit electronically. Some offices accept deeds digitally but still want certain supporting documents on paper.

Keep the Numbers Matching the 1099-S

The affidavit is a state filing, but the same closing usually triggers a federal reporting form. The person responsible for closing the sale, generally the title company, attorney, or settlement agent, files IRS Form 1099-S to report the sale.⁸ It covers sales of improved or unimproved land, residential and commercial buildings, condominiums, and cooperative housing stock. Even transactions that aren’t currently taxable, like a home sale covered by the Section 121 exclusion, are still reportable.

The seller receives a copy showing gross proceeds. The consideration you put on DFA Form 725 should match the gross proceeds on the 1099-S. A discrepancy invites questions from both the state and the IRS, so check the numbers against each other before you sign either document.

1
Justia Law. Arkansas Code 26-60-110 – Recordation of Deed
2
Justia Law. Arkansas Code 26-60-107 – Real Property Transfer Tax Affidavit of Compliance Form
3
Justia Law. Arkansas Code 26-60-105 – Levy on Deeds, Instruments, and Writings – Additional Tax
4
Justia Law. Arkansas Code 26-60-102 – Transfers to Which Chapter Inapplicable
5
Washington County, AR. Documents Filed, Fees, and Requirements
6
Arkansas State Legislature. Act 752 of the Regular Session
7
CSC Global. CSC eRecording Availability in Arkansas
8
Internal Revenue Service. Instructions for Form 1099-S