Who Pays Transfer Tax in South Carolina: Seller or Buyer?

In South Carolina, the seller pays the transfer tax by default. The state calls it the deed recording fee, and under state law the grantor (seller) is primarily responsible for it, with the grantee (buyer) secondarily liable if the seller doesn’t pay. The fee is $1.85 for every $500 of the property’s value. Buyers and sellers can shift that cost to the other side in the purchase contract, and in a few specific deed types the buyer is actually the primary party on the hook.

The Statutory Default: Seller Pays

South Carolina Code § 12-24-20 puts primary liability for the deed recording fee on the grantor. When a deed lists more than one grantor, they are jointly and severally liable, so the state can collect the entire fee from any one of them.¹

The buyer is not completely clear of it. The same statute makes the grantee secondarily liable, meaning the state can turn to the buyer if the seller fails to pay. In a typical closing where a title company or closing attorney disburses funds, that secondary liability rarely matters because the fee gets paid at the table before anyone leaves.

When the Buyer Is Primarily Liable Instead

Three categories flip the default. For a master-in-equity deed, a deed from a government entity, or a deed from a qualified retirement plan, the grantee is the party primarily responsible for the fee.¹ If you are buying at a foreclosure sale or picking up government-owned property, plan on paying the fee yourself.

Negotiating Who Actually Pays

The statutory rule is a starting point, not a ceiling. Buyers and sellers routinely negotiate who covers the deed recording fee in the purchase agreement. In a hot market, buyers sometimes offer to pay it as a concession; in a slower market, sellers may absorb it to close a deal. Whatever the contract says between the parties, the state still looks to the grantor first if the fee goes unpaid, so a seller who contractually pushed the cost to the buyer should confirm the payment actually clears at closing.

How Much the Transfer Tax Costs

The deed recording fee is $1.85 for each $500 of value, with any partial $500 rounded up to the next increment.² Of each $1.85, the state keeps $1.30 and the county where the property sits keeps $0.55.³

Two quick examples. On a $250,000 sale, divide by 500 to get 500 increments, multiply by $1.85, and the fee is $925. On a $400,000 sale, the same math produces $1,480.

What Counts Toward “Value”

The fee is calculated on the total consideration for the property, not just the cash price. Consideration includes any property exchanged, debt forgiven or assumed, partnership interests transferred, and any other benefit the seller receives.⁴

When a transfer has no clear sales price, such as a property swap or a sale paid partly in services, the fee is based on whichever is determinable: the fair market value of the consideration paid, the fair market value of the property, or the property tax assessed value.⁴

The Assumed-Mortgage Deduction

If a mortgage or other lien existed on the property before the transfer and stays on it after, the balance of that lien comes off the consideration used to calculate the fee. Say a buyer pays $1,000 cash and assumes a mortgage with an $81,000 balance. The fee is calculated on $1,000, not $82,000.⁵

To claim the deduction, the deed or affidavit has to identify the mortgage book and page number along with the balance being assumed.⁵ A new purchase-money mortgage the buyer takes out at closing does not qualify, because it didn’t exist on the property before the transfer.

Transfers That Owe No Fee at All

South Carolina exempts a long list of transfers from the deed recording fee under § 12-24-40. The ones most likely to come up in an ordinary transaction:

Deeds where the property’s value is $100 or less, which also covers true gifts with no consideration of any kind.⁶
Transfers to the federal government, any state or its agencies, or political subdivisions such as school districts.⁶
Transfers between spouses or former spouses where no gain or loss is recognized under Internal Revenue Code § 1041, which covers transfers incident to divorce.⁶
Partitions among co-owners, provided no one pays anything beyond their share of the property.
Contributions of property into a corporation, partnership, or trust when the only consideration received is stock, a partnership interest, or a beneficial interest in the trust. Transfers in the reverse direction are generally not exempt, with a narrow carve-out for distributions from a family partnership or family trust where the only consideration is a reduction in the recipient’s ownership interest.
Transfers from a merging corporation to the surviving entity in a statutory merger or consolidation.
Deeds of distribution to an heir under § 62-3-907, along with equivalent distributions from a trust upon the settlor’s death.²

Smaller exemptions cover transfers of individual cemetery grave spaces and contracts for timber to be cut. To claim any exemption, the specific statutory subsection has to be cited in the Affidavit of Consideration filed with the deed.

What Happens If the Fee Isn’t Paid

The general penalty provisions in Chapter 54 of Title 12 apply to both the state and county portions of the deed recording fee. On top of that, a failure to pay the correct amount carries a separate penalty of $50 to $500 for each failure.⁷ The Department of Revenue can waive or reduce the penalty, but that discretion is not something to count on. Getting the math right before filing is the safer route.

If You’re the Buyer, Keep the Closing Statement

When the buyer ends up paying the fee, the amount can be added to the property’s cost basis. IRS Publication 523 lists transfer and stamp taxes among the settlement costs a buyer may include in basis.⁸ A higher basis means a smaller taxable gain whenever you sell, so hold on to the closing statement that documents what you paid.

1
South Carolina Legislature. South Carolina Code 12-24-20 – Liability for Fee
2
South Carolina Legislature. South Carolina Code Title 12, Chapter 24 – Deed Recording Fee
3
South Carolina Department of Revenue. Deed Recording Fee
4
South Carolina Department of Revenue. Deed Recording Fee
5
Legal Information Institute. South Carolina Code Regs 117-1350 – Deed Fee-Assumption of a Mortgage in the Conveyance of Real Property
6
South Carolina Legislature. South Carolina Code 12-24-40 – Exemptions
7
South Carolina Legislature. South Carolina Code 12-24-120 – Penalties
8
Internal Revenue Service. Publication 523 – Selling Your Home