Are you buying, selling, or transferring your Philly home’s title to someone else? You probably owe tax on this transfer of home ownership. Whenever a property changes hands in Philadelphia, a Realty Transfer Tax is collected to support the City’s General Fund. Here’s a quick refresher to help you avoid surprises at the closing table.

Buying or selling a home in Philly doesn’t end with paying closing costs, attorney fees, or real estate agent commissions. There’s also a 3.27% Philadelphia Realty Transfer Tax to take care of, in addition to a 1% tax from the Commonwealth.

The Transfer Tax is imposed on the property’s sale price or assessed value, plus any debts (liens or judgments) the seller may have, which the buyer agrees to pay. If no sale occurred, the Office of Property Assessment (OPA) determines the Transfer Tax rate.

If you are refinancing your home, and the name is not changing on the title, you don’t owe Transfer Tax.

When is it due?

The Realty Transfer tax is usually paid when the new deed is filed with the Department of Records. In general, the tax must be paid within 30 days of the date of the transfer.

Any payment received beyond this period incurs an additional charge. But that’s not all; if the departments of Revenue or Records determine that there was an attempt to bypass this tax, the tax assessment will include an additional 50% of the tax due.

Paying the City’s Realty Transfer Tax is the best way to make the transfer of your proper’s title official. The Records Department will not record your deed or transfer document until you pay this tax.

Ways to pay

The Department of Records only accepts cash, certified checks, or money order for this tax. You can pay:

  • In person –at the Department of Records, located in City Hall, Room 111, or
  • By mail.

To pay by mail, remember to complete and send two copies of the  Philadelphia Real Estate Transfer Tax Certificate and a copy of the Pennsylvania Realty Transfer Tax Statement of Value form along with your payment to:

City of Philadelphia Dept. of Records
Room 156, City Hall
Philadelphia, PA 19107

Exemptions

You don’t have to pay the Realty Transfer Tax if the transfer of home ownership is between family members, such as spouses, siblings. But you must submit appropriate documentation to establish this relationship. You are also exempted from paying this tax if the property is:

  • Willed to you,
  • Transferred between religious organizations, or
  • Transferred to a government entity.

Non-profit organizations are NOT exempted from paying the Realty Transfer Tax.

Photo credit: Elenaiwata flickr

Visit our Realty Transfer Tax webpage to learn more about this City tax.