How much is the transfer tax when selling a house in Philadelphia?

The City of Philadelphia lists the realty transfer tax as 3.578 percent city tax plus 1 percent Commonwealth tax, which totals 4.578 percent. The tax applies to the sale price or assessed value, plus any assumed debt. The rate can change, so confirm it on phila.gov or with the settlement agent when you set a closing date. This can be one of the larger closing costs. At 4.578 percent, even a modest sale price leads to a bill in the thousands. That is one reason to ask each buyer who pays what. The contract language matters more than custom. If an offer says the seller pays all transfer tax, subtract the buyer's half from the offer to see its true value next to an offer that splits the tax.

Take a house that sells for $200,000. The total tax is 4.578 percent of that, or $9,156. If the buyer and seller split it evenly, each pays $4,578. That is an illustration, not a quote. Your sales contract controls who pays, and the base can be the assessed value in some cases.

The City says the tax typically splits evenly between buyer and seller, although the split is not required. The City has the right to collect 100 percent of the tax from either party. Payment is due within 30 days after the real estate is acquired, when the deed is presented for recording. Options include paying online through the Philadelphia Tax Center, filing in person with the Department of Records, or mailing certified checks. The City says penalties can reach 50 percent of the tax due if you misrepresent the transaction or fail to record.

Ask for a written estimate of the transfer tax on your sale price, and ask what base the City will use. Ask whether the contract splits the tax evenly, and who writes the check at closing. Ask whether any exemption applies to your deed, and what documents the Department of Records will want. Ask what happens if the deed is recorded late. The City says payment is due within 30 days after the real estate is acquired, and that penalties can reach 50 percent of the tax due if a transaction is misrepresented or not recorded. Get the answers in writing, so that nothing surprises you at the table.

Transfer tax is one line in the net sheet. Ask every buyer to show you who pays what. Kaizen Home Buyers buys Philadelphia houses as-is for cash, with no repairs and no agent commission. We make offers within 24 hours and can close in 14 to 30 days or on your date. Call 267-329-0084. A real estate attorney can review the numbers.