06 Oct Who Pays the Transfer Tax When You Sell a House in Pennsylvania
By custom, the buyer and the seller each pay half of the realty transfer tax when a house sells in Pennsylvania. That split isn’t set by law. It’s a term in your agreement of sale, and the state holds both of you responsible for the full tax until it’s paid.
So there are two answers. Who pays is whatever you and the buyer put in writing. If the tax goes unpaid, both of you are responsible.
Who pays the transfer tax in Pennsylvania?
The Pennsylvania Department of Revenue holds the seller and the buyer “jointly and severally liable” for the realty transfer tax. In plain terms, the state can collect the whole amount from either one.
The Department also says the two sides can split the tax any way they like by private agreement, and that it isn’t bound by that agreement.
That’s why half and half is a custom and not a rule. Your agreement of sale is where the split is written down, and you and the buyer can write in something other than half and half. What ends up in your signed agreement is the share you’ve agreed to pay.
How much is the transfer tax in Pennsylvania?
The tax has two parts:
- The state’s share. Pennsylvania charges 1% of the sale price, wherever in the state the house is.
- The local share. Local taxing bodies add their own share, and the rate depends on where the house is.
Montgomery County lists its total realty transfer tax at 2%. Bridgeport is an example: the borough’s local transfer tax is 1%, and with the state’s 1%, the total comes to 2%.
Philadelphia is higher. Since July 1, 2025, the rate there has been 3.578% for the city plus 1% for the state, 4.578% in total. If you’ve seen 4.278% online, that was the rate before the July 2025 increase.
The local share can differ by municipality, so check the rate for your own before you run the numbers. Your agent or title company can confirm it.
What does the split look like on a $400,000 sale?
Here’s an example. The price is illustrative, not a typical price and not a prediction for your home.
Example: a house sells for $400,000.
| On a $400,000 sale | Bridgeport, Montgomery County | Philadelphia |
|---|---|---|
| Total transfer tax rate | 2% | 4.578% |
| Total transfer tax | $400,000 × 2% = $8,000 | $400,000 × 4.578% = $18,312 |
| Your share with an even split | $4,000 | $9,156 |
| Your share if you pay all of it | $8,000 | $18,312 |
| Your share if the buyer pays all of it | $0 | $0 |
At the same price, your share can be anywhere from nothing to the full amount. The agreement of sale decides which.
Can you negotiate who pays the transfer tax?
Yes. It’s a term of the sale, like the price, the settlement date or a repair credit. For example:
- A buyer can ask you to pay their half along with yours.
- You can offer to pay the whole tax as one of your terms.
- You can ask the buyer to pay all of it.
When you compare offers, put the transfer tax next to the price. In the Bridgeport example, paying the buyer’s half costs you another $4,000. An offer that asks you to pay the whole tax has to be more than $4,000 higher before you come out ahead, because the tax is charged on the higher price too.
A net sheet shows each offer line by line. We go through every line of one in What It Costs to Sell a House in the Philadelphia Suburbs.
Who is responsible if the transfer tax isn’t paid?
Both of you. The state can collect the full tax from either the seller or the buyer, whatever your agreement says. Philadelphia’s Department of Revenue puts it the same way: the City has the right to collect 100% of the tax from either party.
The way a settlement runs is meant to prevent that. The title or settlement company handling your closing collects each side’s share at settlement and pays the tax when the deed is recorded.
So if you agree to anything other than an even split, make sure it’s written into the signed agreement and shows up correctly on your settlement statement before you sign.
When is the transfer tax paid?
The tax is due when the deed is presented for recording. In the suburbs, that happens at the county Recorder of Deeds. In Philadelphia, it’s the Department of Records.
As a seller, you’ll see your share as a line on your settlement statement. It comes out of your proceeds at settlement.
Are any transfers exempt from the transfer tax?
Some are. The Department of Revenue’s list includes certain transfers between family members and property that passes to heirs when an owner dies.
An ordinary sale to a buyer isn’t on that list. That includes a house you inherited: receiving it may be exempt, but selling it to a buyer is taxed like any other sale.
Exemptions come with conditions and paperwork. If you think one applies to you, ask a title company or a real estate attorney before you sign an agreement.
Can you deduct the transfer tax?
Not as a deduction. The IRS says you can’t deduct transfer taxes on the sale of a personal home. If you’re the seller and you pay them, they count as an expense of the sale, which reduces the amount your gain is figured on. If you’re the buyer, they’re added to your cost basis in the home.
Ask your tax advisor how that applies to your return.
What should you do before you list?
- Find your rate. Look up the transfer tax for the municipality your house is in, not just the county.
- Know your number both ways. Work out your share with an even split and with you paying all of it.
- Decide your position early. If a buyer asks you to cover their half, you’ll already know what it costs.
Frequently asked questions
Does the seller have to pay half of the transfer tax in Pennsylvania?
No law sets the split. Half and half is the custom, and your agreement of sale is where it’s written down. You and the buyer can agree to something different.
Is the transfer tax the same everywhere in Pennsylvania?
No. The state’s 1% applies everywhere, but the local share differs. Montgomery County’s total is 2%, and Philadelphia’s is 4.578%.
Is the transfer tax the same as property tax?
No. Property tax is billed every year you own the home. The realty transfer tax is charged once, when the deed changes hands.
If I sell one house and buy another, do I pay the transfer tax twice?
The tax applies to each sale, at the rate where each property is. With an even split on both, you pay half on the house you sell and half on the house you buy.
What will the transfer tax cost on your sale?
Where your house is sets the rate. What you and the buyer agree to sets your share. If you’re thinking about selling in Philadelphia or the Philadelphia suburbs, we’ll put the transfer tax and every other line into a net sheet for your house. Any value range we give you is a broker price opinion, and a broker price opinion is not an appraisal. Contact Plus Realtors and tell us where your home is.