Georgia Real Estate Exam Math: Transfer Tax, Commission & Cap Rate
Math problems for the Georgia real estate exam — Georgia transfer tax calculations, commission splits, capitalization rate, and proration.
Math questions appear throughout Georgia's 152-question exam. Here are the key formulas and worked examples.
Georgia Real Estate Transfer Tax
Georgia imposes a real estate transfer tax on property conveyances.
Rate: $1.00 per $1,000 of consideration (or $0.10 per $100) - Equivalent to 0.1% of the purchase price
Who pays: The seller, unless otherwise agreed.
Minimum: $1.00
Example 1: A property sells for $340,000. - $340,000 ÷ $1,000 = 340 - Transfer tax: 340 × $1.00 = $340.00
Example 2: A property sells for $785,500. - $785,500 ÷ $1,000 = 785.5 → round to 786 (pay on each $1,000 or fraction thereof) - Transfer tax: 786 × $1.00 = $786.00
Note: Georgia rounds up for fractions, just like Florida's doc stamps.
Commission Calculations
Example 1: A property sells for $495,000. Commission rate is 6%, split evenly between listing and buyer's broker. The listing salesperson earns 50% of the listing side. What does the listing salesperson earn?
- Total commission: $495,000 × 0.06 = $29,700
- Listing side: $29,700 ÷ 2 = $14,850
- Salesperson share: $14,850 × 0.50 = $7,425
Example 2: A seller wants to net $250,000 after a 5.5% commission. What must the home sell for? - Sale Price × (1 - 0.055) = $250,000 - Sale Price × 0.945 = $250,000 - Sale Price = $250,000 ÷ 0.945 = $264,550.26
Capitalization Rate / Income Approach
Example: A rental property has annual gross income of $96,000. Operating expenses are $38,000. The market cap rate is 7.5%. What is the property's estimated value?
- NOI = $96,000 - $38,000 = $58,000
- Value = NOI ÷ Cap Rate = $58,000 ÷ 0.075 = $773,333
Proration (360-Day or 365-Day)
Check whether the Georgia exam specifies 360 or 365 days — prepare for both.
Example (365-day year): Annual property taxes are $4,380. Closing on September 30. Taxes are paid in arrears.
- Daily rate: $4,380 ÷ 365 = $12/day
- Days seller owned (Jan 1–Sept 30): 31+28+31+30+31+30+31+31+30 = 273 days
- Seller's credit to buyer: 273 × $12 = $3,276
Loan-to-Value
Example: Purchase price: $320,000. Down payment: $48,000. What is the LTV ratio? - Loan amount: $320,000 - $48,000 = $272,000 - LTV: $272,000 ÷ $320,000 = 85% → PMI required
[Practice Georgia math at CARealestate.com/states/georgia](https://carealestate.com/states/georgia)
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