Which of the following does NOT incur a conveyance tax?

Which of the following does NOT incur a conveyance tax?

• A. Gift deeds
• B. Commercial leases over 5 years
• C. Transfers under laws of descent
• D. Mortgage assumption agreements

Answer: (D)

The correct answer is identified as the situation that does not incur a conveyance tax, specifically mortgage assumption agreements. In the context of real estate transactions, a conveyance tax is typically levied on the transfer of real property interests. Mortgage assumption agreements allow a buyer to take over the seller’s existing mortgage, assuming the debt but not transferring ownership of the property itself. Since there is no transfer of the property in such agreements, they do not trigger a conveyance tax. This situation is distinctly different from the other options, where an actual transfer of property interest occurs. Gift deeds, for example, involve the transfer of property without compensation, yet they still incur a conveyance tax if the property’s value exceeds a certain threshold. Similarly, commercial leases over five years can be subject to conveyance taxes due to the extended term implying a transfer of interest in the property. Transfers under laws of descent, such as when property is passed on to heirs after a death, also typically incur a conveyance tax despite being a non-sale transfer. Thus, mortgage assumption agreements are unique in that they do not represent a transfer of property interests, thereby excluding them from conveyance tax obligations.

The correct answer is identified as the situation that does not incur a conveyance tax, specifically mortgage assumption agreements. In the context of real estate transactions, a conveyance tax is typically levied on the transfer of real property interests.

Mortgage assumption agreements allow a buyer to take over the seller’s existing mortgage, assuming the debt but not transferring ownership of the property itself. Since there is no transfer of the property in such agreements, they do not trigger a conveyance tax. This situation is distinctly different from the other options, where an actual transfer of property interest occurs.

Gift deeds, for example, involve the transfer of property without compensation, yet they still incur a conveyance tax if the property’s value exceeds a certain threshold. Similarly, commercial leases over five years can be subject to conveyance taxes due to the extended term implying a transfer of interest in the property. Transfers under laws of descent, such as when property is passed on to heirs after a death, also typically incur a conveyance tax despite being a non-sale transfer.

Thus, mortgage assumption agreements are unique in that they do not represent a transfer of property interests, thereby excluding them from conveyance tax obligations.