"Minnesota's Two Closing Taxes: Which One Is on My Loan, and Why Is the Deed Tax the Seller's?"

Your Loan Estimate for the home in Minnesota arrives three days after you apply. On page 2, under a heading called Taxes and Other Government Fees, there is a line called Transfer Taxes with a few hundred dollars on it. The page never uses the words deed tax or registry tax, even though your agent mentioned both taxes when you wrote the offer, and now one of them seems to be missing and the other has no name. The figure on that line is the mortgage registry tax, which is figured on your loan amount, and the deed tax is usually the seller's to pay.

Minnesota charges two state taxes at a home closing. The mortgage registry tax is imposed when your mortgage is recorded and is measured on the debt the mortgage secures, so it follows your loan and shows up in your closing costs. The deed tax is measured on the sale price, and the seller owes it by statute, though a purchase agreement can shift it to you.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, including Minnesota, NMLS #483943, through C2 Financial Corporation.

Most of the states I lend in have nothing like the registry tax. The state-by-state page on mortgage recording taxes lists the handful that charge one, and Minnesota is on that short list. If you are moving to Minnesota from almost anywhere else, this is a line you have never budgeted for.

What is the difference between Minnesota's deed tax and mortgage registry tax?

Both taxes come from the same chapter of Minnesota law, chapter 287, and the county collects both when the paperwork is recorded, which is why they get talked about as a pair. They are measured on different numbers and triggered by different documents.

The deed tax is a tax on the home changing hands. Minn. Stat. 287.21 imposes it on the deed that conveys the property from the seller to you, measured on the net consideration, which on an ordinary purchase is the price you agreed to pay. The Minnesota Department of Revenue's deed tax rate page puts the state rate at 0.33 percent of that amount. A transfer of $3,000 or less pays a flat $1.65 instead, and a transfer that small almost never happens on a home purchase. The deed is recorded once, when you buy, so the deed tax is a purchase cost only. A refinance later on transfers no deed and owes no deed tax.

The mortgage registry tax is a tax on recording a mortgage. Minn. Stat. 287.035 imposes it on the debt secured by a recorded mortgage on Minnesota real estate, and the Department of Revenue's mortgage tax rate page puts the state rate at 0.23 percent of the debt secured. The base is your loan amount. A larger loan pays more, a smaller down payment pays more, and a cash purchase pays none at all. A refinance records a new mortgage, so the registry tax comes back every time you refinance, which is why the Minnesota refinance page treats it as a cost that grows with your balance.

Those rates are the ones the Department of Revenue publishes today. They are written into statute, so the legislature can change them, and the two rate pages linked above are the place to confirm a figure.

Who pays the deed tax in Minnesota?

The seller, unless the purchase agreement says otherwise. The Minnesota House Research Department's brief on mortgage and deed taxes says the seller is ultimately liable for the deed tax. In the same paragraph it notes that nothing in the statute prevents a seller from passing that tax along to the buyer through a private contract. The default is the seller's, and the purchase agreement is the one place the default can change. The same brief explains why the county's name is on the receipt for a state tax: the county collects both taxes, keeps three percent for administering them, and sends the other 97 percent to the state's general fund.

In practice, Minnesota purchase agreements are usually written with the seller paying the deed tax, which is how the Minnesota mortgage page describes it. A seller can propose shifting it to you, and in a competitive market you may see that in a counteroffer. If you agree, the deed tax becomes part of your closing costs, and the federal disclosure rules then require it to appear on your Loan Estimate as a transfer tax.

Who pays the mortgage registry tax in Minnesota?

The tax is imposed when your mortgage is recorded, and it is measured on the debt that mortgage secures, so it travels with your loan rather than with the home. In a Minnesota purchase it is customarily your line, and on your Loan Estimate it appears in your closing costs under Taxes and Other Government Fees. The Department of Revenue's material describes what triggers the tax and how it is measured, and it does not assign the tax to one party by name. At a Minnesota closing it shows up in your column on every financed purchase, and again on every refinance that records a new mortgage.

Some title companies label it "state tax stamps" on an estimate. It is the registry tax under a different name, and the statute sets it rather than the title company.

Because it is your line, it is also a line a seller can agree to cover. A seller paying your registry tax is a seller contribution toward your closing costs, and the limits on what a seller can pay toward your closing costs apply to it like everything else the seller pays for you.

Hennepin and Ramsey counties add a little to both taxes

Two counties charge an Environmental Response Fund tax on top of both state taxes, and the Department of Revenue's rate pages linked above show the add-on at 0.01 percent in each. Hennepin's authority is Minn. Stat. 383B.80 and Ramsey's is Minn. Stat. 383A.80. Both statutes currently say the authority to impose the tax expires January 1, 2028, and I have not confirmed that the legislature has extended it. If the home is in Hennepin or Ramsey County, it is worth asking the title company whether the surcharge still applies when you close.

Minnesota ZIP codes cross county lines, and a Minneapolis or Saint Paul mailing address does not settle which county records your deed, so ask the title company. The dollars involved are small, as the illustration below shows.

How do I find both taxes on the Loan Estimate and Closing Disclosure?

Page 2 of the Loan Estimate has a Section E called Taxes and Other Government Fees, with two lines under it: Recording Fees and Other Taxes, and Transfer Taxes. The CFPB's guide to the Loan Estimate and Closing Disclosure defines Transfer Taxes as state and local government fees on mortgages and home sales that are based on the loan amount or the sale price. Both Minnesota taxes are measured on one of those two numbers, so both belong on the Transfer Taxes line, and the county's ordinary per-document recording charge goes on the line above it.

The Loan Estimate shows only what you are expected to pay. The CFPB guide says transfer taxes the seller pays are not disclosed as Transfer Taxes on the Loan Estimate. On an ordinary Minnesota purchase, that means the Transfer Taxes line on your Loan Estimate is your registry tax, and the deed tax is absent from your form because it is the seller's. If your agreement shifts the deed tax to you, the line should carry both taxes added together.

You can divide the Transfer Taxes figure by your loan amount to see what it covers. If you land near 0.0023, or near 0.0024 in Hennepin or Ramsey, the line is the registry tax by itself. If the result is larger, the deed tax is the likely reason, so ask the loan officer what the figure includes.

The Closing Disclosure, also on page 2, splits every cost into two paid-by columns, one for you and one for the seller. Section E there shows the registry tax in your column and the deed tax in the seller's column, both under Transfer Taxes, so it is the one page where you can see both taxes at once.

The steps before you sign the purchase agreement

1. Read the paragraph of the purchase agreement that assigns closing costs, and find the sentence about the state deed tax. In most Minnesota agreements it names the seller, and if it names you, that is a term you are agreeing to.
2. Ask the title company which county will record the deed and the mortgage, because Hennepin and Ramsey add to both taxes and a mailing address does not answer the question.
3. Open your Loan Estimate to page 2 and divide the Transfer Taxes figure by your loan amount. A result near 0.0023, or near 0.0024 in Hennepin or Ramsey, means the line is the registry tax alone, and a larger result means something has been added.
4. If the seller has offered to pay some of your closing costs, settle whether the registry tax is inside that amount, because the seller contribution limits for your loan program apply to it.
5. Compare Section E on the Closing Disclosure to Section E on the Loan Estimate before the signing appointment. The registry tax should match, and the deed tax should be in the seller's column unless you agreed otherwise.
6. Look at the owner's title policy line while you are on that page. In Minnesota you will customarily pay for it, and who pays for the owner's title policy is another cost the contract decides rather than the law.

Common mistakes with Minnesota closing taxes

Budgeting from a calculator built for another state. Most national closing-cost tools have no mortgage registry tax in them, because most states do not charge one, so a Minnesota estimate that includes it will read higher and will be the one that is right.

Assuming the deed tax is yours because it is a closing tax. By statute it is the seller's, and it only becomes yours if the purchase agreement says so.

Forgetting the registry tax returns on a refinance. The deed tax is a one-time purchase cost, while the registry tax is charged every time a new mortgage is recorded, so it belongs in the break-even math on any later Minnesota refinance.

An illustration, so the shape is clear

Numbers below are made up to show the mechanism. They are not a quote and not anyone's real closing. The rates are the ones the Department of Revenue publishes today, and they can change.

Say you are buying a Minnesota home for $400,000 with a $360,000 mortgage, in a county other than Hennepin or Ramsey.

Sale price                                        $400,000
Deed tax at 0.33%  (the seller's, by statute)       $1,320

Loan amount                                       $360,000
Mortgage registry tax at 0.23%  (your line)           $828

Now put the same purchase in Hennepin or Ramsey County, where each tax carries the 0.01 percent Environmental Response Fund add-on while that authority lasts.

Deed tax add-on       $400,000 x 0.0001                 $40
Registry tax add-on   $360,000 x 0.0001                 $36

Three years later you refinance the same home with a new $350,000 mortgage. Recording that new mortgage brings the registry tax back, at 0.23 percent of $350,000, which is $805, and that is the only state tax on this closing.

Your next step

If you are shopping in Minnesota, run your numbers and you will see rates priced for your own scenario, your debt ratio, and closing costs built against Minnesota's mortgage registry tax and deed tax rather than a national average. No credit pull, no account, and nobody calls you.

Once you want a letter a Minnesota seller will take seriously, getting pre-approved for a Minnesota mortgage is where your income, debts and credit get reviewed properly, with the registry tax priced against your actual loan amount and county. And after you close, the next Minnesota deadline belongs to the county assessor, which is covered in how to get homestead classification on a Minnesota home you just bought.

Nothing here is a loan approval, a denial, a commitment to lend, or legal or tax advice. The Minnesota legislature sets both taxes, the county where your documents are recorded collects them, and the current rates and rules belong to the Minnesota Department of Revenue and your county recorder.

Common questions

Who pays the deed tax in Minnesota, the buyer or the seller?

The seller, by statute, unless the purchase agreement moves it to the buyer. The Minnesota House Research Department's brief on mortgage and deed taxes states that the seller is ultimately liable for the deed tax. It also states that the statute does not prevent a seller from passing it to the buyer through a private contract. Minnesota purchase agreements are customarily written with the seller paying it, and when an agreement assigns it to the buyer instead, it moves into the buyer's column on the Closing Disclosure.

Do I pay mortgage registry tax when I buy a home in Minnesota?

Yes, if you are financing the purchase. Minn. Stat. 287.035 imposes the mortgage registry tax on the debt secured by a recorded mortgage on Minnesota real estate, and the Department of Revenue lists the state rate at 0.23 percent of the debt secured. The tax follows the loan rather than the home, so it is customarily the buyer's cost in a Minnesota purchase and appears in the buyer's closing costs on the Loan Estimate. A cash purchase records no mortgage and pays none.

Where is the Minnesota mortgage registry tax on my Loan Estimate?

Page 2, Section E, Taxes and Other Government Fees, on the Transfer Taxes line. The CFPB's guide to the Loan Estimate defines Transfer Taxes as state and local government fees on mortgages and home sales that are based on the loan amount or the sale price. The registry tax is measured on the loan amount, so it belongs there, and the county's ordinary per-document recording charge is on the line above it.

Is the Minnesota deed tax charged on a refinance?

No. Minn. Stat. 287.21 imposes the deed tax on a deed or instrument that conveys real property, measured on the net consideration, and a refinance conveys nothing. Only the mortgage registry tax applies to a Minnesota refinance, because a new mortgage is recorded, and it is measured on the new loan amount. That is why a larger refinance, or a cash-out refinance, carries more registry tax than a smaller one for the same paperwork.

Why is the tax higher in Hennepin County or Ramsey County?

Because those two counties add an Environmental Response Fund tax of 0.01 percent to both the state deed tax and the state mortgage registry tax. Hennepin's authority is Minn. Stat. 383B.80 and Ramsey's is Minn. Stat. 383A.80, and both statutes currently set the expiration of that authority at January 1, 2028. No other Minnesota county charges it. Minnesota ZIP codes cross county lines, so confirm the recording county with the title company rather than reading it off a mailing address.