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Realty Transfer Tax

Overview

The Realty Transfer Tax is levied on the sale or transfer of Real Estate located in Philadelphia. The tax also applies to the sale or transfer of an interest in a corporation or partnership that owns real estate and is primarily in the real estate business as defined by the taxing ordinance

The City tax rate is applied to the sale price, plus any assumed debt, or if no sales price exists, then the tax is calculated using a formula that is based on the assessed value as set by the Office of Property Assessment which results in a computed fair market value.

Underpayment of the tax due to falsifying the terms of a real estate transaction or failing to record a real estate transaction may result in penalties of up to 50% of the tax due.
 

Who Must File

The amount of the city and state Realty Transfer Tax in a normal arms length residential transactions is usually evenly split between the buyer and seller. Terms of sale for any real estate transaction may call for a different arrangement.  The tax is paid when the deed is filed with the Records Department, located in Room 111, City Hall.
 
For the designated time period, the following Policy Statement replaces Philadelphia Code § 19-1402(14)(b): Realty Transfer Tax Policy Statement

Exclusions from Realty Transfer Tax

Generally the transfer of real estate between family members is exempt. Examples are a transfer between husband and wife, children of the same parent, and lineal ascendants / descendants. All family exemptions require documentation. Fraudulent exemption claims will result in a bill for the full amount due including interest and penalty.

Property that is received under a will is also exempt BUT property purchases from an estate are taxed. When a property is willed to multiple parties and one party buys the property from the estate, tax is due as it is not a transfer under the Will.

Overview

Tax Type Code
18

Rate
3% (City)
+1% (Commonwealth)
= 4% (Total)