There has been some confusion with the real estate transfer tax system in NH. In the past, many RETT’s would pay a tax when transferring a piece of property from a RETT, that may have held several properties, into a single entity without consideration. Often times they would have to pay the state transfer tax for this maneuver. The state of NH decided to clean up this gray area with the following :
“House bill 1656: NHAR attached an amendment to this bill in the Senate Ways and Means Committee to exempt entity-to-entity transfers when the ownership does not change and there is no consideration exchanged for the transfer of real estate. NH supreme Court cases over the past several years dealing with the applicability of the RETT on certain transfers of real estate to a single-purpose entity for refinancing purposes provided seemingly contradictory guidance. ”
The bill clarifies those issues and makes it clear that no consideration exists for tax purposes if the sole reason for the transfer is to obtain financing. The bill also clarifies the RETT for transfers to revocable trusts as LLC’s for overall estate planning purposes. The bill has been signed by the Governor and is in effect.