Taxing Jurisdictions

• Pennsylvania has the authority, by statute, to impose a realty transfer tax. The state statute also allows local governments of a specifically defined size and class to impose their own tax according to a preset limit. Those local governments that don't fall within the defined size and class of the state statute may impose their own tax, without any limit.
  
  

Amount of Tax

• Pennsylvania imposes a 2 percent tax on the value of the real property transaction and allows the local government to impose up to a similar two percent tax. Philadelphia and Pittsburgh have even higher taxes. Normally, the buyer pays one-half of the tax due and the seller pays the other half.
  
  

Exceptions

• Pennsylvania law provides for a number of exceptions. These exceptions include certain family transactions, transactions involving charities and transactions involving state-related universities. The exceptions may benefit only one or both sides to the transaction.
  
  

Practical Tips

• The broker handling the sale should know the taxes due and should have all the necessary forms. If there is no broker then the office handling the title search on the property should know what to do. The recorder of deeds for the local government will also have the information on the amount of the local tax and the forms that need to be completed.
  
  

Disclaimer

• This article does not constitute legal advice and does not create a legal relationship. Readers should consult their local real estate attorney.