Real Estate Transfer Tax
A 2% tax is imposed on all transfers of interests or possessor rights in and to real estate located in the Town by deed, lease, assignment of lease, or agreement for sale of stock or contract.
Exemptions for Real Estate Transfer Tax (RETT) are given based upon certain criteria which can be found in the Town of Avon Municipal Code Chapter 3.12.060. These exemptions may relieve some or all of the tax due.
All Real Estate Transfer Tax Applications require an application.
All transactions for real property within the Town of Avon in which no transfer tax is due, must have a related exemption application approved by the Assistant Town Manager. This includes any transaction recorded with Eagle County such as a name change, transfer to trust or LLC., addition of spouse, etc.
Primary Residence Exemption(s)
Those seeking a Primary Residence Exemption must execute an affidavit and promissory note (affidavit example) in addition to the application. There is a $26 application fee payable by cash or check for all Primary Residence Exemptions.
Primary Residence Exemption Checklist
- Read the conditions of the primary exemption below
- Real Estate Transfer Tax Application
- Promissory Note & Affidavit
- Check or cash for $26
(15) Primary Residence Exemption -The conditions of the Primary Exemption include:
- The applicant must meet the definition of a Primary Resident as provided in section 3.12.020 of the Town of Avon Municipal Code.
- Occupation and use of a residence as a primary residence must occur within thirty (30) days of transfer of the real property, provided that the Town Manager may grant an extension of an additional ninety (90) days if extenuating circumstances are found to exist in the Town Manager’s discretion and provided that such extension request is included with the applicant’s application for exemption.
- The first $160,000 of the purchase price is exempted from the 2% transfer tax, therefore the maximum exemption is $3,200. The exemption is only applicable to the buyers portion of the tax. The seller is not intended to benefit from the primary exemption.
- A lien for the amount of exempted transfer tax is placed on the property for one full year after the date of acquisition. The Town will release the lien no sooner than one year after the acquisition date if the Borrower provides evidence that the property was used as a primary residence. Evidence may include a Colorado Driver’s License or ID and/or voter registration that lists the exempted property as the applicant’s current address.
- If the applicant does not meet these conditions, or sells the property within the first year of residency, the amount of exempted transfer tax will be immediately due and payable.
If you have previously received a Primary Residence Exemption, then you may apply for a Subsequent Primary Residence exemption.
(16) Subsequent Primary Residence exemption –This exemption is used when an applicant has previously received the (15) Primary Residence exemption on another property. The applicant must execute all of the documents required for exemption (15), and in addition, provide an employment verification letter from the current employer which states that the applicant meets the definition of an Eagle County employee by working an average of at least 30 hours per week per year or earns 75% of his/her income by working in Eagle County. Retired individuals applying for this exemption must have worked a minimum of five years in Eagle County for an average of at least 30 hours per week per year evidenced by a verification letter from the past employer.
Following is a list of common exemption types with require an application to be competed as well as the additional information listed. For all full exemptions provide the deed and information necessary to demonstrate that the requested exemption applies to the transfer.
(1) Governmental Entity - provide deed, or draft deed, evidencing that either the Buyer or Seller is a local, state or federal governmental entity.
(2) Gift/Charity - provide deed or affirmation stating that there is no other consideration other than love, affection or charity for the transfer.
(3) Termination of Joint Tenancy – provide deed evidencing the termination of a joint tenancy.
(4) Death, Will & Decree of Dissolution – provide a copy of the death certificate, will, and/or relevant court decrees in addition to the deed.
(5) Capital Investment or Business Reorganization – provide copies of business entity documents sufficient to demonstrate that the underlying percentage ownership interest of the Buyer in the property has not changed as a result of the transfer.
(10) Lease Less than 25 years – provide a copy of the lease with a term less than 25 years. NOTE: as defined in Chapter 3.12 of the Avon Municipal Code, the term of the lease includes the initial term plus all extensions stated in the lease.
Please refer to the Avon Municipal Code 3.23.020 for a full list of exemptions.