Request for Reimbursement of Real Estate Expenses Involving Transfer Tax

GAO was asked to determine whether an employee may be reimbursed all of the transfer tax he paid in connection with the purchase of a home incident to his transfer. When the employee was transferred, he purchased a home and paid a transfer tax totaling 2 percent of the purchase price. In the county where the purchase was made, it is the usual practice for the transfer tax to be split equally between the purchaser and the seller. Therefore, upon application for reimbursement of the real estate expenses, 50 percent of the transfer tax was disallowed. The employee presented additional evidence which showed that in the portion of the county in which he had purchased his home, it was customary for the purchaser to pay the entire real estate transfer tax. GAO has consistently held that where the tax is determined to be a transfer or sales tax and is customarily paid by the purchaser, the employee may be reimbursed where he paid these taxes incident to his transfer. Accordingly, the reclaim voucher was authorized for payment.