A row home in Philadelphia sells for $350,000. The state transfer tax is 1% and the Philadelphia local rate is 3.278%. If the buyer and seller split the total tax equally, how much does each party pay?
Correct Answer
C) $7,487 each
Total rate = 1% + 3.278% = 4.278%. Total tax = $350,000 × 4.278% = $14,973. Each party = $14,973 ÷ 2 = $7,486.50, rounded to $7,487.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A bargain and sale deed implies that the grantor holds title and possession of the property but does not include warranties against encumbrances or title defects.
The chain of title is the sequential history of all transfers of ownership for a specific property, from the original source (typically a government patent or grant) to the present owner. An unbroken chain is essential for marketable title.
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
More Pa Transfer Taxes Questions
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A buyer in Philadelphia asks their agent whether the high transfer tax can be financed into the mortgage. What is the correct advice?
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- → A homeowner in Philadelphia converts their primary residence to a rental property and then sells it two years later. The transfer tax rate in Philadelphia remains 4.278% regardless of property use. Does the conversion to rental affect the transfer tax?
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What is the local realty transfer tax rate in Philadelphia, Pennsylvania?
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A buyer purchases a condo in Center City Philadelphia for $525,000. The total transfer tax rate (state + Philadelphia local) is 4.278%. The seller agrees to pay the entire transfer tax as a buyer incentive. What is the total transfer tax the seller must pay?