What does 'no consideration' deed mean?
Consider all the factors, talk to a pro when choosing how to transfer a property
When someone says "no consideration" deed, what does it mean? Does it mean no transfer and recordation taxes? No. It actually means that the property is being transferred via deed without money exchanging hands.
Not all no consideration deeds are exempt from transfer and recordation taxes. There are a number of situations where a "no consideration" deed is appropriate and some of them are as follows:
Transfer between husband and wife;
Transfer between individual and a revocable trust;
Transfer between Personal Representative of an Estate and the beneficiaries of the Estate;
Transfer from individual(s) into an LLC;
Transfer from LLC into individuals;
Transfer from parents to children;
Transfer from children to parents;
Transfers pursuant to a divorce decree or settlement agreement;
Transfer pursuant to a termination of a domestic partnership;
Transfer between domestic partners;
Inter-familial transfers i.e. grandparents to grandchildren or sisters to brothers, etc; and
Transfer pursuant to a termination of a Partnership or Corporation.
This just gives an idea of situations when a "no consideration" deed may be used. It is very important to check your jurisdiction to see if there are any transfer and/or recordation taxes if you choose to do this type of transfer.
In cases where transfer/recordation taxes are likely, the tax assessment for the property is typically used to determine the amount of taxes owed.
It is really important to consider all of the factors and talk to a professional when you are deciding how your property is going to be transferred.