Real Estate Transfer Tax
There is a Transfer Tax of 2% (1% to the state and 1% to the municipality and school district) for all property sales in Pennsylvania on the value of the property or interest being conveyed. This value is not necessarily the sales price. The 2% Transfer Tax is paid at the time of recording.
State and local governments do not stipulate who pays the Transfer Tax. In most sale agreements, the seller and buyer divide the tax. However, the new owner is responsible if there is any question over the amount paid.
Some transactions are exempt from Transfer Tax. Some examples would be conveyances between husband and wife, parents and child, grandparent and grandchild, brothers and sisters. A one-time transfer is allowed between former spouses.
Other exemptions are allowed in certain situations. It is always best to consult an attorney or contact our office at 215-348-6209 for any questions.
Statement of Value
This is a specific state form that is used either to set the value of the property being conveyed or to give the reason for exemption. It must be presented in duplicate and is forwarded by us to the Department of Revenue.
Anytime the transfer tax is not paid or anytime the true value of the land is not shown on the deed (such as in a $1 consideration), a statement of value is needed. State investigators then check the property and see if the value is as stated or if the reason given for exemption is valid.
Visit the PA Department of Revenue's Realty Transfer Tax Forms page to access the Realty Transfer Tax/Statement of Value forms from the state.
Additional Transfer Tax
When the state investigator determines the property being sold is worth more than stated or if the reason for exemption is not valid, additional transfer tax may be assessed. A "determination" is sent directly to you by the PA Department of Revenue.
The additional state tax and interest are paid to them. They issue a receipt to our office to be recorded showing the taxes that were due and paid.