The Deed Tax Lands on the Sale Side
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
The mortgage tax is charged when you borrow. The deed tax is charged when you sell. A buy-before-you-sell does both, which is why the two belong in one estimate.
The rule
The Minnesota Department of Revenue states that the Deed Tax rate is 0.0033 of the net consideration, and that Hennepin and Ramsey counties have an additional Environmental Response Fund Tax of 0.0001.
| Location | Calculation on a $200,000 sale | Tax due |
|---|---|---|
| All Minnesota counties | 0.0033 x $200,000 | $660 |
| Hennepin County | (0.0033 x $200,000) + (0.0001 x $200,000) | $680 |
| Ramsey County | (0.0033 x $200,000) + (0.0001 x $200,000) | $680 |
Those figures are the Department's own example.
Why it belongs in net proceeds
Every buy-before-you-sell structure except keeping the home settles against the sale.
- A bridge loan is repaid in full from the proceeds.
- A second mortgage or equity line taken for the down payment is paid off at that closing.
- A recast on the new mortgage is funded by applying proceeds to principal.
Anything that comes off the top of the sale reduces what those structures have to work with, so the deed tax sits in the net-proceeds line rather than being thought of as a purchase cost.
Taxed on both ends
Minnesota is unusual in reaching a move-up from two directions. The mortgage registry tax at 0.0023 of the debt secured applies when you record a mortgage, and the Department states the borrower is liable. The deed tax at 0.0033 of net consideration applies when you record the deed on the sale.
A plan that records two mortgages and one deed touches the tax three times. See the mortgage registry tax page.
How to model it
- Expected sale price on the departing home.
- Less the deed tax at the rate for that county.
- Less the existing mortgage payoff.
- Less any second mortgage or equity line taken to fund the down payment.
- Less ordinary costs of sale.
What remains is what retires a bridge or funds a recast. If it comes out thin, the answer is usually a different structure rather than a larger loan. See the structures page and the calculator.
The structure with no deed tax at all
Keeping the departing home as a rental records no deed, so no deed tax arises. It also produces no proceeds, so the structure has to stand on the rental offset and on reserves instead. See the rental conversion page.
Frequently asked questions
What is Minnesota's deed tax rate?
0.0033 of the net consideration, per the Minnesota Department of Revenue, with an additional 0.0001 Environmental Response Fund Tax in Hennepin and Ramsey counties.
How much is Minnesota deed tax on a $200,000 sale?
Using the Department's own example, $660 in most Minnesota counties and $680 in Hennepin or Ramsey where the Environmental Response Fund Tax applies.
Is Minnesota deed tax a purchase cost or a sale cost?
It applies on recording the deed when the property sells, so for a move-up it belongs in the net proceeds of the departing home rather than in the costs of the new purchase.
Does keeping my Minnesota home as a rental avoid the deed tax?
Yes, because no deed is recorded. It also produces no sale proceeds, so that structure has to stand on the rental offset under Fannie Mae B3-3.8-05 and on reserves.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Minnesota mortgage registry tax and deed tax are administered by the Minnesota Department of Revenue and exemptions depend on your facts; your closing agent, your CPA or a Minnesota attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.