A PA property is sold with seller financing (purchase money mortgage). The buyer puts $50,000 down and the seller carries a $200,000 mortgage. The total sale price is $250,000 with a 2% transfer tax rate. What is the transfer tax base?
Correct Answer
D) $250,000 (the full sale price)
The transfer tax is based on the full sale price of $250,000, regardless of how the purchase is financed. Seller financing does not reduce the transfer tax base.
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A general warranty deed provides the greatest protection to the grantee by guaranteeing that the grantor holds clear title and has the right to sell the property. It includes covenants that protect against all defects in title, even those arising before the grantor owned the property.
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Marketable title is title that is free from reasonable doubt as to who the owner is and free from liens, encumbrances, or defects that would cause a reasonable buyer to hesitate before purchasing. It is also known as merchantable title.
More Pa Transfer Taxes Questions
A real estate licensee working in Philadelphia must be aware that the city's transfer tax rate is different from the rest of Pennsylvania. What is the approximate total transfer tax rate (state + Philadelphia local) that applies in Philadelphia?
A buyer in Philadelphia purchases a property for $225,000. The total transfer tax rate is 4.278%. The buyer uses an FHA loan requiring a 3.5% down payment. The transfer tax is calculated on the sale price, not the loan amount. If split equally, what is the buyer's transfer tax?
A buyer in Philadelphia asks their agent whether the high transfer tax can be financed into the mortgage. What is the correct advice?
A government agency in Pennsylvania (e.g., a redevelopment authority) is selling a property to a private buyer. Is the transfer tax due on this sale?
A PA property sells for $460,000 with a total 2% transfer tax. The contract requires the seller to pay 60% and the buyer to pay 40%. What is the seller's transfer tax payment?
- → 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?
- → What is the combined typical total realty transfer tax rate (state + local) in most Pennsylvania counties outside of Philadelphia?
- → A duplex in Dauphin County, PA sells for $310,000. The total transfer tax rate is 2%. The seller agrees to pay 60% of the total tax and the buyer pays 40%. What is the buyer's transfer tax obligation?
- → When a buyer in Pennsylvania is comparing transfer tax costs between two properties in different municipalities, what should the buyer's agent advise?
- → In PA, when a property sale includes a seller credit for repairs, does the credit reduce the transfer tax base?
- → A condo unit in Lehigh County, PA sells for $195,000. The total transfer tax rate is 2%. If split equally between buyer and seller, what does each party pay?
- → Under PA transfer tax law, local transfer tax revenue is used by local governments for all of the following purposes EXCEPT:
- → A property in a Pennsylvania municipality with a total 2% transfer tax (1% state + 1% local) sells for $425,000. The local 1% is split with 0.5% going to the county and 0.5% going to the municipality. How much does each local entity receive?
- → A property in a PA municipality with a total 2.5% transfer tax rate (1% state + 1.5% local) sells for $600,000. The parties split the tax equally. What is each party's transfer tax obligation?
- → A PA buyer is purchasing a property where the municipality has a 0.75% transfer tax and the county has a 0.5% transfer tax. The state tax is 1%. What is the total transfer tax rate?
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