How do you calculate the cost of documentary stamps on deeds?

To determine the cost of documentary stamps on deeds, the correct method involves calculating the number of increments of $100 in the purchase price and then applying the relevant rate to that figure. This process is important because documentary stamp taxes are assessed based on the total value of the transaction, and in many jurisdictions, the cost is typically calculated at a rate per $100 of the purchase price.

The calculation begins with identifying how many increments of $100 are contained within the total purchase price. After establishing that number, the tax rate is then applied. For documentary stamps, it is common for this tax rate to be $0.70 per each $100 increment. Therefore, the total cost of the documentary stamps is obtained by multiplying the number of increments by this rate.

This approach ensures that the tax assessment aligns with the value of the deed and adheres to legal taxation standards. By focusing on counting the increments first and then applying the rate, it creates an accurate and methodical way to determine the total cost of the documentary stamps involved in the property transaction. This systematic calculation reflects the standardized process used in real estate transactions.