Does New Mexico have a real estate transfer tax?
No. New Mexico doesn’t levy a deed tax, documentary stamp tax or transfer tax on real estate sales, and no county or city in the state adds one. On a $2 million apartment building, the transfer tax is $0.
That puts New Mexico with Texas, Arizona and Utah, none of which tax real estate transfers either. Colorado’s documentary fee is a penny per $100, and Oklahoma charges 75 cents per $500, so a seller crossing any of New Mexico’s borders will find, at most, a small transfer cost.
The lack of a tax doesn’t mean the deed goes through without paperwork. New Mexico requires a sales affidavit for residential property, and it applies to the sale of an apartment building.
What you pay to record a deed in New Mexico
The county clerk charges a flat recording fee. Under NMSA 1978, Section 14-8-15(B), the clerk collects $25 for each document filed or recorded unless another law sets a different fee. A deed is one document, a mortgage release is another, and each one is $25.
The fee doesn’t change with the price. A $400,000 fourplex and a $6 million apartment complex pay the same $25 to record the deed. Your settlement statement may show several recording lines, one for each lien release and one for the deed, but together they rarely add up to more than a few hundred dollars.
Who pays recording costs is set by your purchase contract, and a commercial contract can split them any way the parties agree.
The residential real property transfer declaration affidavit
NMSA 1978, Section 7-38-12.1 requires an affidavit whenever a deed, real estate contract or memorandum of real estate contract transfers an interest in real property classified as residential for property tax purposes. The transferor, transferee or either side’s agent files it with the county assessor within 30 days of filing the deed with the county clerk.
Apartment buildings are covered. New Mexico’s property tax code defines residential property in Section 7-35-2 as one or more dwellings used primarily for permanent human habitation, with the land under them and land reasonably needed for parking. A 5+ unit apartment building fits that definition. Hotels and motels, built for transient stays, do not. Some older apartment buildings have storefronts on the ground floor. Section 7-36-2.1 has the Taxation and Revenue Department split mixed-use value between its residential and nonresidential parts, so a building with apartments over storefronts still has a residential portion, and the affidavit should be filed. When in doubt, file it: the form costs nothing, and a missing affidavit is easier to prevent than to fix after closing.
The affidavit is confidential. The statute says it is to be used only for analytical and statistical purposes, the assessor keeps the original as a confidential record, and its contents are not part of the assessor’s valuation record. The form, titled Residential Property Transfer Declaration Affidavit, asks for the buyers and sellers, the legal description and the sale date, among other details, and it is signed before a notary.
Which transfers don’t need the affidavit
Subsection D of Section 7-38-12.1 lists transfers that are exempt from the affidavit requirement. They matter for owners restructuring rather than selling.
- Deeds transferring nonresidential property, such as a retail strip or warehouse.
- Deeds given on payment in full or forfeiture under a recorded real estate contract.
- Leases and easements.
- Quitclaim deeds used to quiet title.
- Conveyances made under a court order.
- Gifts and distributions from an estate.
Who pays transfer tax in New Mexico?
No one, because the tax doesn’t exist. The closing cost conversation in New Mexico is about title insurance, escrow or closing fees, recording fees and prorations, and each of those is allocated in the purchase contract.
That makes contract language matter more than custom. Read the closing cost section of any letter of intent closely, because a buyer who would pay half a transfer tax in another state has nothing to trade here, and the remaining costs can be split any way the parties choose.
Real estate contracts, LLC transfers and 1031 exchanges
New Mexico sellers often finance a sale with a real estate contract, where the buyer pays over time and receives the deed when the contract is paid off. The affidavit rule reaches real estate contracts and memoranda of real estate contracts, so file it when the contract or memorandum is recorded. The later deed given on payment in full is exempt from a second affidavit, and neither step carries a transfer tax.
Moving your building into an LLC you own costs only the $25 recording fee. Because New Mexico has no transfer tax, it also has no controlling-interest tax, so selling the membership interests in the LLC that owns the building isn’t taxed as a transfer either.
A 1031 exchange works without a transfer cost on the New Mexico side. The sale of the relinquished building and any replacement property you buy in New Mexico record for flat fees. If you exchange into Colorado or Oklahoma, budget for their small transfer charges on the replacement closing.
Worked example: a $2 million apartment building
Take a 36-unit building in Albuquerque selling for $2,000,000. The New Mexico transfer tax is $0. Recording the deed costs $25, and recording a release of your existing mortgage costs another $25. The affidavit is filed with the Bernalillo County assessor within 30 days, with no filing tax.
The same sale in Colorado would carry a documentary fee of $200, at $0.01 per $100 under C.R.S. 39-13-102. In Oklahoma, the documentary stamp tax at $0.75 per $500 would be $3,000. At $5,000,000, those figures are $500 in Colorado and $7,500 in Oklahoma, against $0 in New Mexico.
None of these numbers is large next to income taxes, but on a multi-property sale or a portfolio exchange, New Mexico’s flat fees keep closing math simple.
| State | Rate | Tax on $2,000,000 | Tax on $5,000,000 |
|---|---|---|---|
| New Mexico | None | $0 | $0 |
| Texas | None | $0 | $0 |
| Arizona | None | $0 | $0 |
| Utah | None | $0 | $0 |
| Colorado | $0.01 per $100 (0.01%) | $200 | $500 |
| Oklahoma | $0.75 per $500 (0.15%) | $3,000 | $7,500 |
Why it still matters to sellers
A buyer’s total cost to close shapes what it can pay. In states where the buyer pays a percentage-based transfer tax or mortgage tax, that money comes out of the same budget as your price. In New Mexico, the buyer’s closing costs are mostly title, lender and due diligence charges, which leaves more room in the offer.
The confidential affidavit also helps. Because the affidavit is kept out of the assessor’s valuation record and there is no transfer tax stamped on the deed, your price doesn’t become a public number simply because you recorded a deed. Expect a buyer to see the rent roll and operating history, though, and to price the building on them.
How the sale fits into your total tax bill
Without a transfer tax, the significant taxes on a New Mexico apartment sale are income taxes. The federal government taxes long-term capital gains, recaptures depreciation you’ve claimed at up to 25%, and adds the 3.8% net investment income tax for higher earners. New Mexico taxes the gain under its personal income tax, which our New Mexico capital gains page covers in detail.
A 1031 exchange defers both federal and New Mexico income tax if you meet the identification and closing deadlines. A real estate contract can spread the gain under the installment method as payments arrive. Either way, the transfer side of the deal costs only recording fees.
Selling your New Mexico apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units in New Mexico, including Albuquerque, Santa Fe, Las Cruces, Rio Rancho and Farmington. We buy directly, can offer seller-carry terms and can close inside 1031 exchange timelines.
Send the address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours, and our offer will show how the closing costs are split so you can see your net before you sign.
