Philadelphia Real Estate Transfer Tax, Explained
The tax due when property changes hands — how it's split and when exemptions apply.
What is the Philadelphia realty transfer tax?
The realty transfer tax is a tax on the transfer of real estate, due when a deed is recorded. In Philadelphia it combines a City component and a Pennsylvania Commonwealth component, so the total rate is higher than in most of the state. It is calculated on the value of the property being transferred.
Who pays it — buyer or seller?
By custom the transfer tax is split evenly between buyer and seller, but that is negotiable and the agreement of sale controls who actually pays. In a commercial deal, allocation of the transfer tax is a real dollar term worth negotiating rather than assuming.
When do exemptions apply?
Certain transfers are exempt or excluded — for example, transfers between spouses or certain family members, and some transfers into or out of wholly-owned entities. The rules are technical, and structuring a transaction to fit an exemption (or avoiding an unexpected tax on an entity transfer) is exactly where advice pays off.
How Nochumson P.C. helps
Nochumson P.C. structures real estate transfers to handle transfer tax correctly and to capture available exemptions. Contact us before you transfer property.
Related articles:
- Philadelphia's 10-Year Property Tax Abatement, Explained
- How to Appeal Your Philadelphia Property Tax Assessment
- Philadelphia Use & Occupancy (U&O) Tax: What Owners Owe
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