How Much Does a 1031 Exchange Cost?
A clear breakdown of 1031 exchange costs — the Qualified Intermediary fee, per-property charges, and why the fee is tiny next to the tax you defer.
5 min read
The cost of a 1031 exchange is one of the first things investors ask about — and the good news is that it’s usually modest compared to what you’re deferring. Here’s what actually goes into the price, and how to think about whether it’s worth it (it almost always is).
The Qualified Intermediary fee
The main cost that’s specific to a 1031 is the Qualified Intermediary fee — what you pay the neutral party that holds your proceeds and administers the exchange. For a standard deferred exchange with one property sold and one bought, that fee typically runs somewhere in the range of $800 to $1,500. Additional replacement properties usually add a modest per-property charge.
xchange1031 charges one flat, transparent service fee for a standard exchange — no surprise add-ons. See current pricing on the homepage.
Costs you’d pay anyway
The rest of the money you spend isn’t really "1031 cost" — it’s the normal cost of buying and selling real estate, which you’d incur with or without an exchange:
- Title insurance and settlement / escrow fees.
- Recording fees and any transfer taxes.
- Real-estate commissions on the sale and purchase.
- Lender fees if you finance the replacement property.
When structures cost more
More complex exchanges cost more because they involve an extra entity that temporarily holds title. A reverse exchange (buy first, sell later) or an improvement exchange (build or renovate with exchange funds) can run several thousand dollars in accommodation fees, plus the carrying costs of the property while it’s held. If you only need a standard deferred exchange, you won’t pay these.
The math that makes it worth it
Weigh the fee against the tax you defer. A four-figure QI fee sits next to a tax bill that’s often five or six figures once you add up federal capital gains, depreciation recapture at up to 25%, the 3.8% surtax, and state tax. Deferring that keeps your full equity working in the next property instead of handing a chunk to the IRS today.
Want to see your own numbers? Our free capital gains and boot calculator estimates the tax a 1031 could defer for you. For the bigger picture, start with the complete guide to 1031 exchanges, or check a specific question in the answers hub.
General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.