Massachusetts Deeds Excise Tax and a 1031 Exchange

The excise is $2.28 per $500 statewide, the seller pays it, and an exchange is still a sale

Massachusetts General Laws chapter 64D, section 1 levies an excise on any deed by which realty sold is conveyed to a purchaser, when the consideration, exclusive of any lien or encumbrance remaining on the property, exceeds $100. The statutory figure is $2.00 per $500 or fraction, and a 14% surtax brings it to the $2.28 that DOR Directive 95-4 states as "the rate of the excise (except for Barnstable county)." The directive adds that the excise "is self-assessed and paid by the person who makes or signs the deed" by stamps sold through the registries.

Because the tax is per $500 or fraction, the price is rounded up first. The Nantucket Registry of Deeds FAQ puts it as $4.56 per $1,000 "rounded up to the nearest $500," so a $1,500,250 price is taxed as $1,500,500: 3,001 units at $2.28, or $6,842.28.

DOR Directive 89-14 asks whether an exchange of two parcels is subject to the excise and answers that "the conveyance of each parcel is subject to the deeds excise," with the consideration in a like-kind exchange being "the value of the property received by the transferee." In a deferred exchange through a qualified intermediary your deed to the buyer is a sale for cash stamped at the full price, and the seller of your replacement stamps their own deed.

Barnstable County and the islands cost more

Chapter 64D sets a lower state base in Barnstable County, $1.50 per $500, but the county adds its own excise. The Barnstable County Registry of Deeds fee schedule states the combined rate as "$6.48 per $1,000.00," a state rate of $3.42 and a county rate of $3.06 per $1,000, computed by multiplying the rounded consideration by 0.00648. On a $1,500,000 Cape Cod sale that is $9,720 instead of $6,840.

Nantucket and Martha's Vineyard add a land bank fee. The Nantucket registry will not record a transfer until the Nantucket Islands Land Bank has processed it, and the Martha's Vineyard Land Bank Commission states that it "collects a fee on the island's real estate transactions." Those fees are collected from the buyer rather than through the seller's stamps; confirm the current percentage with the land bank before closing.

No other county charges above the statewide rate, and a registry will not record a deed without the right stamps; delivering one without them carries a penalty under chapter 64D, section 6A.

Debt the buyer takes over comes off the base; new financing does not

The statute measures consideration "exclusive of the value of any lien or encumbrance remaining thereon at the time of sale." Directive 89-14 restates the rule and its limit: encumbrances not removed at closing are not taxed, but "no deduction may be made for encumbrances placed on the property at the time of sale." A buyer who assumes your $400,000 mortgage on a $1,500,000 building pays stamps on $1,100,000; a buyer who borrows new money pays on the whole $1,500,000.

Assumption is rare in exchanges because the intermediary needs cash proceeds to buy the replacement, and the debt replacement rules treat relief from the mortgage as boot unless matched on the other side. Personal property is not stamped either: Directive 89-14's second example excludes cash and stock because only the real estate conveyance is taxed, although a separately priced furniture package is potential boot in a furnished rental.

Since November 2025 a second form rides along on sales of $1 million or more

The excise has not changed, but the closing has. The Department of Revenue's page on filing and withholding rules for sales of $1 million or more states that for closings on or after November 1, 2025 a withholding agent, usually the closing attorney or title company, must file Form NRW within 10 days for every sale with a gross price of $1,000,000 or more, even when nothing is withheld, and every seller must hand the agent a Transferor's Certification on or before closing.

Withholding applies only to nonresident sellers and businesses without a continuing Massachusetts presence, at 4% of the gross price, or 5% of estimated net gain by election, plus 4% on amounts over the surtax threshold, under 830 CMR 62B.2.4. How an exchange interacts with it is on the Massachusetts nonresident withholding page; the general pattern is on state withholding at closing. The stamps are a tax on the deed and are never refunded because the exchange worked; the withholding is a deposit against income tax.

Where the stamps go in your exchange math

The qualified intermediary may pay the excise from sale proceeds. Reg. section 1.1031(k)-1(g)(7) disregards transactional items that "appear under local standards in the typical closing statements," naming "recording or transfer taxes," so the payment is not money received by you, and the Form 8824 instructions reduce boot on line 15 by exchange expenses with any unused amount added to basis on line 18.

A hypothetical with round figures: you sell a $1,500,000 three-family in Worcester through a qualified intermediary. The price is 3,000 units of $500, so the stamps are $6,840, paid from proceeds at closing; the same building on the Cape would carry $9,720. You buy a $1,500,000 replacement in New Hampshire, where the seller's transfer tax is theirs, and your stamps come off any boot or go into the basis of the replacement. Run your own numbers with your CPA.

If the exchange fails, the stamps stay where they are: they were due on the deed, not on the deferral. Where the proceeds go instead, including a traditional DST that records no Massachusetts deed in your name, the closing cost is already fixed by the sale.