North Carolina — Taxes & Land Use — North Carolina Real Estate — State Law Practice Test

This North Carolina Real Estate — State Law North Carolina — Taxes & Land Use practice set has 10 practice questions based on the official exam materials, each with an instant explanation.

Sample questions

Three questions from the North Carolina — Taxes & Land Use bank with the correct answer and an explanation. The practice quiz above draws 10 questions at random from the same bank.

1. In North Carolina, the state excise (transfer) tax on conveyances of real property is charged at what rate?

   • $1.00 for each $500 of consideration (or fraction thereof) — i.e., $2.00 per $1,000 — Correct answer
   • $1.00 for each $1,000 of consideration
   • 1% of the gross sales price, paid at recording
   • $2.00 for each $500 of consideration (or fraction thereof)

   Explanation: North Carolina's excise tax on instruments conveying real property is set by statute at $1.00 for each $500 of the consideration or value of the interest conveyed (or any fractional part of $500). That is equivalent to $2.00 per $1,000, or 0.2% of the sale price. The tax is collected by the register of deeds when the deed is recorded. Excise tax（消费税/契税）: NC transfer tax of $1.00 per $500 of consideration. (G.S. §105-228.28; §105-228.30)

   Handbook: North Carolina Taxes — state excise (transfer) tax rate (G.S. §105-228.28 / §105-228.30)

2. Under North Carolina law, which party is responsible for paying the state excise (transfer) tax at closing?

   • The seller (grantor) — the register of deeds collects it when the deed is recorded — Correct answer
   • The buyer (grantee), as part of the buyer's closing costs
   • The listing broker, out of the commission earned on the sale
   • The closing attorney personally, as the settlement agent of record

   Explanation: By statute the NC excise tax is paid by the SELLER (the grantor/transferor) of the real property, and the register of deeds collects it when the deed is recorded. Although parties may negotiate who ultimately bears costs in the contract, the statutory burden falls on the seller — this is the opposite of what new licensees often assume. Excise tax（消费税/契税）: NC transfer tax paid by the SELLER at recording. (G.S. §105-228.30)

   Handbook: North Carolina Taxes — excise tax paid by the seller (G.S. §105-228.30)

3. A North Carolina home sells for $325,000. Approximately how much state excise (transfer) tax is due, and who pays it?

   • $650, paid by the seller — Correct answer
   • $325, paid by the seller
   • $650, paid by the buyer
   • $3,250, paid by the seller

   Explanation: The excise tax is $1.00 per $500 of consideration (rounding any fraction of $500 up to the next $500). $325,000 ÷ $500 = 650 increments × $1.00 = $650, paid by the seller. A quick check is 0.2% of the price: $325,000 × 0.002 = $650. The buyer does not pay it. Excise tax（消费税/契税）: $1 per $500 → $650 on a $325,000 sale, seller-paid. (G.S. §105-228.30)

   Handbook: North Carolina Taxes — computing the excise tax (G.S. §105-228.30)