Philadelphia realty transfer tax: who pays what at closing
August 11, 2026 · 4 min read
Realty transfer tax surprises more Philadelphia buyers and sellers than any other closing cost. The city imposes its own transfer tax in addition to the Pennsylvania state transfer tax, and the combined bill is due at recording. Understanding it before you get to the settlement table keeps the number from derailing your deal.
Two taxes, one closing
Pennsylvania levies a state realty transfer tax of 1% of the value of the property being transferred. Philadelphia levies its own city transfer tax on top of that. Together they make Philadelphia one of the more expensive jurisdictions in the Commonwealth for transferring real estate.
The tax is calculated on the consideration paid, or on the assessed value adjusted by the state common level ratio when there is no arm's-length price.
Who actually pays
The law makes buyer and seller jointly and severally liable, which means the city can collect from either party. In practice, Philadelphia contracts commonly split the transfer tax evenly between buyer and seller, but this is purely a matter of negotiation and is controlled by the agreement of sale.
New construction deals frequently shift the entire transfer tax to the buyer. Read that clause before you sign.
Common exemptions
Exemptions require a properly completed statement of value filed with the deed. A missing or incorrect statement of value is one of the most common reasons a Philadelphia deed gets rejected at recording.
- Transfers between spouses
- Transfers between parent and child, or grandparent and grandchild
- Transfers between siblings in some circumstances
- Transfers into or out of a revocable living trust for the same beneficial owner
- Certain transfers to or from a wholly owned entity
- Conveyances confirming an existing interest, such as a corrective deed
Budget for it early
Ask for a written estimate of the transfer tax as soon as you are under agreement, not the week of settlement. If an exemption may apply, tell your title agency at the start so the statement of value and supporting documents are ready before the deed goes to the Department of Records.
Frequently asked questions
- Is Philadelphia transfer tax based on the sale price or the assessment?
- It is based on the consideration paid in an arm's-length sale. Where there is no true price, the taxable value is the assessed value multiplied by the applicable common level ratio.
- Can the buyer and seller agree to a different split?
- Yes. The split is a contract term. The city, however, can pursue either party if the tax is not paid, regardless of what the contract says.
- Are family transfers really tax free?
- Qualifying transfers between certain family members are exempt from realty transfer tax, but the exemption must be claimed correctly on the statement of value filed with the deed.
- When is the tax paid?
- At settlement. The title agency collects it and remits it with the deed at recording.