Does North Dakota have a real estate transfer tax?
No. Article X, Section 27 of the North Dakota Constitution says the state and any county, township, city or other political subdivision may not impose mortgage taxes, or sales or transfer taxes on the mortgage or transfer of real property. North Dakota voters added it in November 2014, with about 75% voting yes.
That makes North Dakota different from a state that simply hasn’t passed a transfer tax yet. A statute can be amended in one legislative session. A constitutional ban needs another vote of the people, so buyers and sellers can count on 0% for the long run.
The ban covers every level of government. Fargo, Bismarck, West Fargo and every county are barred from adding a local transfer tax, a deed stamp or a tax on recording a mortgage.
What the ban doesn’t touch is just as important. It stops taxes on the act of transferring or mortgaging real property. It doesn’t limit property tax on the building while you own it, income tax on the gain when you sell it, or the fees a recorder charges to record documents. Those are where your real costs sit, and a buyer will look hard at the property tax bill when pricing your building.
What sellers do pay when a North Dakota deed is recorded
The recorder charges a document fee, and it is small. Under N.D.C.C. 11-18-05, recording costs $20 for a document of one to six pages. Longer documents are $65, plus $3 for each page beyond the first twenty-five. A page is one side of a legal-size sheet.
Who pays recording costs is a matter of contract. The buyer’s deed and mortgage and the releases of your existing liens are each recorded as separate documents, so expect several small lines on the settlement statement. None of them is tied to the price.
Your other selling costs are the usual ones: title insurance under your contract, closing and escrow fees, any brokerage, prorated property taxes and the payoff of your loan. None of them is a state tax on the transfer.
The full consideration statement on the deed
North Dakota doesn’t tax the price, but it does want it reported. N.D.C.C. 11-18-02.2 requires the grantee, or the grantee’s agent, to certify on the deed either the full consideration paid or an exemption that applies. The recorder can’t record a deed that doesn’t comply.
County recorders began accepting only the two certification statements described in the statute on deeds effective August 1, 2025, so older deed forms with a separate statement may need updating. Willfully falsifying the consideration is a class B misdemeanor.
The exemption list in subsection 6 covers sales within the same family or corporate affiliate, forced sales, foreclosures and tax sales, estate settlements, sales to or from religious, charitable or nonprofit organizations, and transfers by quitclaim deed, among others. These are exemptions from reporting the price, not from a tax, because there is no tax.
Who pays transfer tax in North Dakota?
Nobody, because there is no transfer tax to pay. That changes how buyers and sellers talk about closing costs. In Minnesota, the deed tax is a real line item that someone has to absorb. In North Dakota, the closing cost discussion is about title insurance, recording fees and prorations.
Contracts still allocate those costs, and you should read the closing cost section closely. Title policies, escrow fees and recording charges can be split any way the parties agree in a commercial purchase agreement.
LLC transfers, entity sales, foreclosures and 1031 exchanges
Because North Dakota has no transfer tax, the planning questions that matter in other states mostly fall away. Deeding your apartment building into your own LLC costs a recording fee. Selling the membership interests in the LLC instead of the building carries no controlling-interest tax, because the constitution bars any transfer tax.
Foreclosures and deeds in lieu don’t trigger a tax either, though a foreclosure is listed among the full consideration exemptions, so the deed can carry the exemption instead of a price. Gifts and inheritances pass with only recording costs.
A 1031 exchange is cheaper here than in most states. Neither the sale of your relinquished property nor a replacement purchase inside North Dakota carries a transfer tax. If you exchange into Minnesota, the deed tax on the replacement will show up on that closing, depending on how the contract allocates it.
Worked example: a $2 million apartment building
Take a 32-unit building in Fargo selling for $2,000,000. The North Dakota transfer tax is $0. Recording a four-page deed costs $20 under N.D.C.C. 11-18-05, and that fee is the same whether the building sells for $500,000 or $5,000,000.
Across the Red River, the picture changes. Minnesota’s deed tax is 0.33% of net consideration under Minn. Stat. 287.21, so a $2,000,000 sale in Moorhead would carry $6,600 in deed tax. South Dakota’s transfer fee of $0.50 per $500 would cost $2,000 in Sioux Falls. Montana, like North Dakota, has no transfer tax.
At $5,000,000, the North Dakota figure is still $0, while Minnesota’s deed tax would be $16,500 and South Dakota’s fee $5,000.
| Location | Rate | Tax on $2,000,000 | Tax on $5,000,000 |
|---|---|---|---|
| North Dakota | None | $0 | $0 |
| Montana | None (constitution) | $0 | $0 |
| South Dakota | $0.50 per $500 (0.1%) | $2,000 | $5,000 |
| Minnesota | 0.33% deed tax | $6,600 | $16,500 |
Why the absence of a transfer tax matters to sellers
A buyer pricing your building counts every dollar it has to spend to close. In a state with a 1% or 2% transfer tax, part of that cost lands on the seller and part gets priced into what the buyer will pay. In North Dakota, neither side carries it, and the constitutional ban on mortgage taxes keeps the buyer’s financing costs lower too.
That doesn’t make North Dakota closings free. Lenders still charge for appraisals, environmental reports and title work, and a buyer of a 5+ unit building will scrutinize the rent roll, utility costs and property taxes. But you won’t lose a percentage of your price to the state on the way out.
It also makes the math on smaller deals cleaner. A recording fee of $20 is the same on a 6-unit building as on a 60-unit complex.
Closing checklist for a North Dakota apartment sale
Without a transfer tax return to prepare, the paperwork at a North Dakota closing is mostly about the deed and the building itself. These are the items that most often hold up a 5+ unit sale.
- A deed that carries the grantee’s certification of full consideration, or a cited exemption from N.D.C.C. 11-18-02.2(6), so the recorder will accept it.
- Payoff letters and recorded releases for every mortgage and lien on the property.
- A current rent roll, copies of leases and a list of security deposits to be credited to the buyer.
- Twelve to twenty-four months of operating statements and utility bills, which the buyer’s lender will ask for.
- Service contracts for laundry, trash, snow removal and anything else the buyer will take over or cancel.
- If you are doing a 1031 exchange, your qualified intermediary’s assignment documents, signed before closing.
How the sale fits into your total tax bill
With no transfer tax, the taxes that matter on a North Dakota apartment sale are income taxes. The federal government taxes long-term capital gains and recaptures depreciation you’ve claimed at up to 25%, and higher earners can owe the 3.8% net investment income tax. North Dakota taxes the gain under its own income tax, which our North Dakota capital gains page covers.
A 1031 exchange can defer the federal and state income tax if you buy replacement property within the deadlines. Seller financing can spread the gain over the years you receive payments. In both cases the transfer side of the transaction costs only recording fees.
Selling your North Dakota apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units in North Dakota, including Fargo, Bismarck, Grand Forks, Minot and West Fargo. We buy directly, can offer seller-carry terms and work inside 1031 exchange timelines.
Send your 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 closing costs are split so you can see your net before you commit.
