Phase 4: Transfer Taxes or “Stamps”

 

 

In Pennsylvania there is a 1% transfer tax on real estate transfers. Most cities, municipalities, townships and boroughs in Pennsylvania also charge a transfer tax which may range from 1% to 4% of the purchase price.  This tax is divided equally between the seller and the buyer in a real estate purchase, although the split could be negotiated differently.

 

 

Tax-Exempt Transfers

Certain transfers are exempt from real estate transfer taxes. These include the following:

  • Transfers between spouses, parents and children or the spouse of a child, siblings or spouse of a sibling, grandparent and grandchild or spouse of grandchild, sisters or brothers-in-law so long as they are not remarried,
  • Gifts or transfer for no consideration which pass under a will or intestate succession where no will is involved
  • Transfer for no consideration to a Trustee where the transfer would be otherwise exempt, i.e., where all beneficiaries of the Trust are exempt family members
  • Transfer for no consideration to a Trustee of a living trust from the creator of that trust
  • Transfers made by corporations because of merger or consolidation
  • Transfers from a corporation to its shareholders or from a limited liability company to its members, of real estate, so long as they have been shareholders or members for two years or more