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Closing Costs

Who Pays What at a Georgia Closing

Georgia's settlement statement carries two taxes most buyers have never heard of, and the one that lands on the buyer's side is legally the lender's bill. A line-by-line look at who normally pays, what the statute actually says, and which lines you can move.

By Mortgage in Georgia Editorial··AI-assisted
This article may be AI-assisted and is published as general editorial information. Verify current rates, program rules, and lender requirements with primary sources before acting on it.
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Settlement statement highlighting who pays what in Georgia closing costs and taxes.

If you have bought a house in another state and are now buying one in Georgia, two lines on your settlement statement will be unfamiliar: the intangible recording tax and the real estate transfer tax. They are small relative to your down payment and large relative to your patience for surprises. They also sit on opposite sides of the table, and buyers routinely assume the wrong one is theirs.

What follows is a line-by-line walk through a Georgia closing: who normally pays each item, whether that assignment comes from a statute or from habit, and which lines are genuinely negotiable. Where a rule is state law, it is cited. Where it is custom, it is labeled as custom, because custom is what your contract can rewrite.

The one rule that governs everything else

Georgia has no statute that divides closing costs between buyer and seller. The purchase and sale agreement controls. That is the whole rule, and it is why any chart claiming to show "who pays what in Georgia" is describing habit, not law.

There are exactly two statutory assignments in the stack, and both are routinely reallocated by contract anyway:

  • Transfer tax — O.C.G.A. § 48-6-3 puts it on "the person who executes the deed, instrument, or other writing or … the person for whose use or benefit" it is executed. In a normal sale, that is the seller. The Georgia Department of Revenue says as much, and adds the caveat: "frequently the parties agree in the sales contract that the buyer will pay the tax."
  • Intangible recording tax — O.C.G.A. § 48-6-61 directs that "the collecting officer shall collect the tax due on the security instrument from the holder of the instrument." The holder is your lender. You will nonetheless see it on your side of the page. More on that below, because it is the single most misread line in a Georgia closing.

The buyer's side, line by line

Marked Structural (the line exists as a matter of law or lender requirement), Customary (habit, movable by contract), or Negotiable (shop it or trade it).

  • Intangible recording tax — Structural, but sized by your loan. $1.50 for each $500.00, or fractional part, of the face amount of the note (§ 48-6-61; Rule 560-11-8-.02). The maximum is $25,000 on any single note, which binds at roughly $8.33 million of face amount and will not affect you. Note the base: the note, not the purchase price.
  • Lender's title insurance and title examination — Structural. Your lender will require the policy; it is priced off the loan amount.
  • Appraisal and credit report — Structural. Ordered by the lender, paid by you.
  • Origination charges and discount points — Negotiable. These are the lines most worth shopping across lenders, and the ones a seller credit most often absorbs.
  • Prepaid interest, first-year hazard insurance premium, and escrow deposits for taxes and insurance — Structural in kind, variable in amount. These are not fees; they are your own money moved forward in time. A closing date late in the month shrinks the prepaid interest line.
  • Recording fees — Structural. Clerk of Superior Court charges for recording the deed and security deed.
  • Closing attorney's fee — Structural. See the section below on why this one is not optional in Georgia.
  • Owner's title insurance — Negotiable, and optional. Who pays it in Georgia is a contract term, not a rule.

The seller's side, line by line

  • Real estate transfer tax — Statutory (§ 48-6-3), reallocable by contract. $1.00 for the first $1,000.00 or fractional part of consideration, plus 10¢ for each additional $100.00 or fractional part (§ 48-6-1). That works out to about $1 per $1,000 of price. It applies when consideration exceeds $100.
  • Real estate commission — Customary and negotiable, governed by the listing and any cooperating-broker arrangement.
  • Existing loan payoff, plus payoff statement and wire fees — Structural.
  • Prorated property taxes through the closing date — Customary, and spelled out in the contract.
  • HOA transfer, estoppel, or resale-certificate fees — Customary, and often the line nobody budgets for.
  • Any negotiated buyer credit — Negotiable, with a hard ceiling set by the buyer's loan program. See the seller-credit section.

One wrinkle worth knowing if you are buying subject to existing financing or taking an assumption: the transfer tax base excludes "the value of any lien or encumbrance existing prior to the sale and not removed by the sale" (§ 48-6-1). The tax is computed on what actually changes hands.

The intangible tax is technically your lender's bill

This is the section to read twice. Section 48-6-61 says the collecting officer collects the tax "from the holder of the instrument" — the lender holds the security deed, so the lender owes the tax. The Georgia Department of Revenue then states the practical consequence plainly on its own intangible recording tax page: the holder "can pass the amount of tax on to the borrower."

In retail mortgage lending, that pass-through happens essentially every time. So what you are looking at on your Closing Disclosure is not a tax you owe the State of Georgia. It is a reimbursement of a tax your lender owes, charged to you because the law permits it. Three things follow from that:

  • The amount tracks the face amount of your note, not the sale price. A larger down payment reduces it dollar for dollar, at $1.50 per $500 of loan.
  • Because it is the lender's tax, the lender's identity can eliminate it — see the credit union exemption below.
  • It has a deadline and teeth. The tax is due within 90 days of the date of the instrument; failure to pay carries a penalty of 50% of the tax plus 1% interest per month (Georgia DOR). This is your closing attorney's job to handle, but it explains why the line is collected at closing rather than billed later.

The math on a $400,000 Georgia purchase

Take a $400,000 house with 10% down, so a $360,000 note.

  • Intangible recording tax: $360,000 ÷ $500 = 720 increments × $1.50 = $1,080, on the buyer's side by custom.
  • Transfer tax: $1.00 on the first $1,000, plus 3,990 × $0.10 on the remaining $399,000 = $400.00, on the seller's side by statute.

Same house, 20% down, $320,000 note: the intangible tax falls to 640 × $1.50 = $960. The transfer tax does not move, because it is keyed to the price, not the loan.

Those two taxes sit on top of ordinary loan costs — attorney fee, lender's title policy, appraisal, credit report, origination, recording, and escrow prepaids. For scale on the rest of the stack, the CFPB found that median total loan costs on home purchase loans rose 22% from 2021, to $5,954 in 2022. That is a national median, not a Georgia figure, and Georgia's transaction taxes are additional.

How to make the intangible tax disappear, legitimately

Because the tax falls on the holder of the instrument, the exemptions are written around who the grantee is. Under Ga. Comp. R. & Regs. 560-11-8-.14, no intangible recording tax is due where the grantee is a federal credit union, a Georgia-chartered credit union, or a church, nor where the grantee is the United States, the State of Georgia, their agencies or political subdivisions, or a public authority. The rule also exempts instruments that secure no note at all — guaranties, indemnities, bail bonds, letters of credit — and corrective or additional security instruments that identify the original.

The practical version for a homebuyer: a credit union loan can zero out the intangible tax line entirely. On the $360,000 example above, that is $1,080 that never appears. It is a real reason to price a credit union against a bank or an independent mortgage lender, and it is almost never volunteered.

One caveat. The exemption belongs to the grantee named on the security instrument. If a credit union brokers or table-funds your loan to a non-exempt lender that ends up as the holder, the exemption does not follow the application. Ask specifically who will be named as grantee on the security deed.

Refinancing: your existing lender has a built-in price advantage

This is the part of Georgia law most likely to change a refinance decision.

  • Same lender, same borrower: under Rule 560-11-8-.05, where the same lender and the same borrower refinance an existing loan on which the intangible tax was already paid, the tax is waived on the refinanced portion of the unpaid principal. The new instrument has to disclose what portion is refinancing.
  • Modification, extension, or renewal: Rule 560-11-8-.04 provides that instruments modifying, extending, or renewing a note on which the tax was already paid do not trigger new tax.
  • New lender: a new note held by a new grantee is a new taxable instrument. You pay the full tax again, on the full new balance.

So when you shop a refinance, your current servicer is not competing on rate alone — it is competing with a several-hundred-to-a-thousand-dollar cost advantage baked into the settlement statement. Get both quotes as full cost comparisons, not rate comparisons, and make the outside lender beat the tax as well as the rate.

What HB 586 changed in 2025

HB 586 was signed by Gov. Kemp on May 9, 2025 and took effect July 1, 2025. It rewrote the definition of a "long-term note secured by real estate" in O.C.G.A. § 48-6-60, moving the threshold from a note with principal falling due more than three years out to one with principal falling due more than 62 months out. Notes maturing inside 62 months are now outside the intangible recording tax altogether.

Who this helps: bridge loans, construction paper, and short-term investor financing that previously ran past three years and got caught. Who it does not help: anyone with an ordinary 30-year purchase mortgage, which is long-term under either definition. It is the most recent substantive change to this tax, and worth knowing about mainly so you do not assume it applies to you.

Why the attorney's fee is not a junk fee

Georgia is an attorney-closing state. In In re UPL Advisory Opinion 2003-2 (Supreme Court of Georgia, decided Nov. 10, 2003; 277 Ga. 472), the court held that preparing a deed of conveyance and facilitating its execution constitutes the practice of law, making a non-attorney closing the unauthorized practice of law. That is why a licensed Georgia attorney's fee appears on every Georgia settlement statement and why you cannot shop it away to zero.

Here is the part most buyers miss. In a financed residential purchase, the closing attorney customarily represents the lender, not you. That attorney will be professional and will answer your questions, but their client is the party writing the loan. If you want counsel whose duty runs to you — reviewing the contract, the title commitment, a survey issue, an unusual seller disclosure — you are hiring a second lawyer, and that is a separate cost decision to make early rather than three days before closing.

Title insurance: two policies, one of them required

The lender's policy is required by your lender, priced off the loan amount, and protects the lender's lien position. It does nothing for your equity.

The owner's policy is optional and protects your own ownership interest against title defects. The CFPB notes that the total cost is usually lower when both policies are purchased from the same provider, and that borrowers are allowed to shop for title services.

Who pays for the owner's policy in Georgia is a contract term, not a statute, and it varies by agreement and by market. Do not trust a "customary in Georgia" chart on this one — open your purchase and sale agreement and read the paragraph.

Seller credits: the contract sets the number, the loan program sets the ceiling

A seller credit is the most effective tool for moving costs off your side of the table, and the most common place a deal quietly breaks. The contract can say any number. Your loan program decides how much of it you may actually use.

Conventional — Fannie Mae Selling Guide B3-4.1-02 caps interested party contributions by loan-to-value on a principal residence or second home:

  • Above 90% LTV: 3%
  • 75.01% to 90% LTV: 6%
  • 75% LTV or less: 9%
  • Investment property, all CLTVs: 2%

IPCs may be applied to closing costs, including prepaids, and to HOA assessments covering up to 12 months after settlement. They may not fund the down payment, reserves, or the borrower's minimum required contribution. Excess IPCs are treated as sales concessions and require a downward adjustment to the sales price.

The classic failure: a buyer with 5% down on a $400,000 conventional loan negotiates a $15,000 seller credit. At 95% LTV the cap is 3%, or $12,000. The extra $3,000 cannot be used as a credit and does not become cash — it has to be restructured, usually as a price reduction, which then re-triggers the appraisal math.

VA — the Department of Veterans Affairs caps seller concessions at 4% of the home's reasonable value, and that 4% bucket includes credits toward the VA funding fee, payoff of the buyer's debts, and prepayment of hazard insurance. On a purchase loan, only the funding fee may be financed; every other fee is paid at closing. First-use purchase funding fee rates effective April 7, 2023 are 2.15% with less than 5% down, 1.5% with 5% or more, and 1.25% with 10% or more.

FHA has its own interested-party contribution limit with the same structure — a percentage cap, with anything over it treated as an inducement to purchase. Ask your loan officer to show you the current figure from HUD Handbook 4000.1 before you write a credit into a contract, rather than relying on a number from a blog.

Quick reference

| Line item | Who normally pays | Statutory or customary | Negotiable? | | --- | --- | --- | --- | | Intangible recording tax | Buyer (passed through) | Statutory on the lender (§ 48-6-61); pass-through permitted by DOR | Rarely moved; can be eliminated by an exempt lender | | Real estate transfer tax | Seller | Statutory (§ 48-6-3) | Yes, by contract | | Closing attorney fee | Buyer | Customary; the attorney requirement is legal (UPL 2003-2) | Fee amount, not the requirement | | Lender's title policy | Buyer | Lender requirement | Shop the provider | | Owner's title policy | Varies | Contract term | Yes — read your agreement | | Appraisal, credit report | Buyer | Lender requirement | No | | Origination and points | Buyer | Customary | Yes | | Escrow deposits and prepaids | Buyer | Lender requirement | Amount varies with closing date | | Recording fees | Buyer | Statutory schedule | No | | Real estate commission | Seller | Customary / contract | Yes | | Property tax proration | Seller through closing | Contract term | Yes | | HOA transfer fees | Varies | Contract term | Yes |

Before you sign

  • Check the intangible tax against your note. Divide the loan amount by $500, round up any fraction, multiply by $1.50. If the number on the page does not match, ask why before closing.
  • Ask whether your lender is an exempt grantee. If a credit union is quoting you, confirm it will be the named grantee on the security deed — that is roughly $1,080 on a $360,000 loan.
  • Compare the Loan Estimate to the Closing Disclosure line by line. Not the bottom lines. Every line.
  • Size the seller credit against your program's cap, not your wish list. Have your loan officer confirm the percentage in writing before the credit goes into the contract.
  • Decide early whether you want your own attorney. The closing attorney in a financed purchase is generally the lender's.
  • If you are refinancing, price the same-lender tax waiver in. An outside lender has to beat both your rate and a tax you would otherwise pay again.

None of this is legal or tax advice, and none of it substitutes for reading your own purchase and sale agreement — which, in Georgia, is the document that actually decides who pays what.

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Mortgage in Georgia is an editorial site. Verify current rate quotes, underwriting standards, and program eligibility directly with lenders and official program sources before acting on this article.

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