Oregon Real Estate Transfer Tax Explained: What Buyers and Sellers Pay

Oregon charges a real estate transfer tax on every property sale, but the structure is more complex than most states. The base rate is a flat $1 per $1,000 of sale price — one of the lowest in the country. However, a tiered surcharge added in 2023 significantly increases the tax on higher-value properties, and Washington County charges an additional local transfer tax that doesn’t exist anywhere else in Oregon. For buyers and sellers in the Portland metro, where the median sale price exceeds $500,000, these surcharges can add thousands to closing costs. Here’s how the full system works.

Oregon Transfer Tax Rate Structure (2026)

Oregon’s transfer tax has two components: the base county recording fee and the state surcharge enacted through House Bill 2003 (2023).

Transfer Tax Calculations: Real Examples

The tiered structure means you don’t pay the higher rate on the entire sale price — only on the portion that exceeds each threshold. Here’s how the math works at several common Oregon price points:

At the statewide median price of $480,000, the transfer tax is just $480 — negligible in the context of a real estate transaction. But at $780,000 (Portland metro median for desirable neighborhoods), the tax climbs to $1,060, and at $1.2 million it reaches $2,100. Still far lower than Washington state’s Real Estate Excise Tax (REET), which runs 1.1–3.0% and would cost $8,580–$13,200 on a $780,000 sale.

Washington County’s Additional Transfer Tax

Washington County (home to Beaverton, Hillsboro, Tigard, and Tualatin) is the only county in Oregon that charges an additional local transfer tax. This $1 per $1,000 surcharge was approved by voters to fund affordable housing initiatives.

Washington County’s additional tax doubles the transfer tax on properties under $500,000 and adds significant cost on higher-value sales. If you’re comparing homes in Beaverton (Washington County) versus Portland (Multnomah County), this is a real cost difference at closing.

Who Pays the Transfer Tax?

Oregon does not legally mandate which party pays the transfer tax — it’s negotiable. However, established custom varies by region:

In practice, who “pays” the transfer tax is part of the overall negotiation. A seller who agrees to pay the full transfer tax may offset it with a higher sale price or by declining to offer other closing cost credits. The economic burden falls on whoever has less negotiating power in the transaction. Use our net proceeds calculator to model transfer tax costs as part of your selling expenses, or our closing cost calculator if you’re buying.

Oregon vs. Other States: Transfer Tax Comparison

Oregon’s transfer tax remains among the lowest on the West Coast, even after the 2023 surcharge. The state’s low transfer tax, combined with no sales tax, makes Oregon’s transaction costs significantly lower than Washington or California for most price points.

Where the Money Goes

Revenue from Oregon’s transfer tax is distributed differently depending on the component:

• Base transfer tax ($1/$1,000): Goes to the county general fund. Used for recording services, county operations, and infrastructure.
• HB 2003 surcharge (tiered): Dedicated to the Oregon Housing and Community Services Department (OHCS) for affordable housing production, homeownership programs, and homelessness prevention. The legislature estimated this surcharge would generate $100–$130 million per biennium.
• Washington County additional tax: Funds the county’s affordable housing production and preservation programs.

The 2023 surcharge was specifically designed to fund housing affordability programs without raising income or property taxes. Use our property tax calculator for detailed numbers. It places the cost on higher-value property transactions — sales over $500,000 — and exempts the majority of transactions in rural Oregon, where median prices fall below the threshold.

Exemptions from Transfer Tax

Certain property transfers are exempt from Oregon’s transfer tax:

• Transfers between spouses or domestic partners (including divorce transfers)
• Transfers by gift or inheritance (no consideration paid)
• Transfers to or from government entities
• Transfers in lieu of foreclosure
• Transfers by court order (including partition sales)
• Certain trust transfers (to/from a revocable living trust when the grantor is a beneficiary)

These exemptions apply to the transfer tax only — other closing costs (escrow fees, title insurance, recording fees) still apply. Consult a real estate attorney or your title company if you believe your transfer qualifies for an exemption.

Transfer Tax and 1031 Exchanges

If you’re selling an investment property through a 1031 exchange, the transfer tax applies to the sale — there’s no exemption for exchanges. However, the transfer tax is a small fraction of the overall transaction cost and is far outweighed by the capital gains tax deferral that a properly structured 1031 exchange provides. On a $750,000 investment property sale, the Oregon transfer tax is approximately $750, while the deferred capital gains tax (federal + state) could be $50,000–$100,000+.

Factor transfer taxes into your exchange calculations using our mortgage calculator to model monthly costs on the replacement property.

Transfer Tax on New Construction

New construction sales are subject to the same transfer tax as existing homes. When a builder sells a newly constructed home for $580,000, the transfer tax is $580 (base) plus $80 (surcharge on $80,000 above $500,000) for a total of $660. There’s no exemption for new builds, spec homes, or model homes.

However, the initial transfer of vacant land to a builder is also subject to transfer tax. A developer purchasing a $200,000 lot pays $200 in transfer tax on that acquisition, then the buyer pays transfer tax on the finished home purchase. The tax applies at each ownership transfer in the development chain.

For buyers purchasing directly from a builder, the transfer tax is typically included in the seller’s closing costs — most builders absorb it as a cost of doing business. Confirm this in writing during the purchase agreement negotiation.

Transfer Tax on Partial Interest Sales

When selling a partial interest in a property (common in divorce settlements, business dissolutions, or co-ownership buyouts), the transfer tax is calculated based on the consideration paid for the partial interest — not the full property value. If a co-owner buys out their partner’s 50% interest in a $600,000 property for $300,000, the transfer tax is based on the $300,000 consideration ($300 base, no surcharge since it’s under $500,000).

Transfers between spouses and domestic partners are exempt, so divorce-related transfers incur no transfer tax regardless of value. This exemption applies whether the transfer is voluntary or court-ordered.

Planning Around the Transfer Tax

While the transfer tax is relatively small compared to other closing costs, there are legitimate strategies to minimize it:

• Exclude personal property: Items that aren’t permanently attached to the real estate (appliances, furniture, hot tubs on decks) can be excluded from the sale price and sold separately. If a $520,000 sale includes $20,000 in personal property, the transfer tax applies to $500,000 (staying below the surcharge threshold) rather than $520,000. Document personal property values accurately — inflating them to avoid transfer tax is illegal.
• Timing with market conditions: In a declining market, selling sooner rather than waiting for a recovery that might push the price above the $500,000 surcharge threshold can save on transfer tax. The savings are marginal, though — a $10,000 price difference above $500,000 only adds $10 in surcharge.
• Structure multi-property deals carefully: If selling a home with a detached lot that has separate tax IDs, selling them as separate transactions may reduce the surcharge if each sale falls below the $500,000 threshold individually.

These strategies matter most for sales near the $500,000 threshold or for luxury properties where the tiered surcharge becomes meaningful. For the vast majority of Oregon transactions, the transfer tax is a minor closing cost that doesn’t warrant special planning. Model your full closing costs with our closing cost calculator.

How Transfer Tax Appears on the Closing Statement

The transfer tax appears on the ALTA Settlement Statement (closing statement) as a line item, usually under “Government Recording and Transfer Charges.” The title company calculates the amount based on the sale price and collects it at closing. The county recorder won’t record the deed without payment of the transfer tax — it’s not optional or deferrable.

On a standard Oregon closing statement for a $550,000 sale, the transfer tax section looks like:

Compare With Other States

Considering other markets? Here’s how other states compare:

• New York Mansion Tax Explained: Rates, Thresholds, and Who Pays
• Pennsylvania Transfer Tax Explained: What Buyers and Sellers Pay
• Michigan Transfer Tax Explained: State and County Rates

Frequently Asked Questions

Is Oregon’s transfer tax deductible on my taxes?

For sellers, the transfer tax is an expense of sale that reduces your capital gain (and therefore your tax liability). For buyers, the transfer tax is added to your cost basis in the property, which reduces your capital gain when you eventually sell. Neither party can deduct the transfer tax as an itemized deduction on their annual income tax return — it’s a transaction cost, not a recurring tax. Consult a tax professional for your specific situation.

Does the transfer tax apply to refinancing?

No. The transfer tax applies only to transfers of property ownership. Refinancing replaces your mortgage but doesn’t transfer ownership, so no transfer tax is owed. You will pay recording fees for the new mortgage document, but these are typically $50–$150 — a fraction of the transfer tax. Use our refinance calculator to model refinancing costs.

How does Oregon’s transfer tax compare to Washington’s REET?

Oregon’s transfer tax is dramatically lower. On a $550,000 sale, Oregon’s total transfer tax is $600 versus Washington’s REET of approximately $6,050 (1.1% on that tier). The difference grows with price: on an $800,000 sale, Oregon charges roughly $1,100 while Washington charges approximately $8,800. This is one of the reasons Portland’s closing costs are significantly lower than Seattle’s, despite similar home prices in some neighborhoods.

Will Oregon’s transfer tax increase?

The 2023 surcharge was framed as a permanent funding source for affordable housing. Future increases are possible — several proposals in the 2025 legislative session sought to lower the $500,000 threshold or increase the surcharge rates. However, any changes require legislative approval, and the real estate industry lobbied heavily against the 2023 surcharge. Short-term increases are unlikely, but homeowners should monitor legislative activity.

Do I pay transfer tax when selling a home I inherited?

If you inherited the home through a will or trust (no sale transaction), no transfer tax was owed at the time of inheritance. When you sell the home to a third party, the standard transfer tax applies based on the sale price. Your cost basis for capital gains purposes is the fair market value at the date of the decedent’s death (stepped-up basis), not the original purchase price. This often results in minimal or no capital gain even if the home has appreciated significantly during the decedent’s ownership.