When you buy or sell a home in Pennsylvania, one of the closing-table surprises is the realty transfer tax — a fee charged every time a property deed changes hands. Most buyers and sellers have no idea what it costs until the settlement sheet lands in front of them. This guide explains exactly how the tax is calculated, step by step, in plain English, so you know what to expect before you sit down at closing.
The math isn’t complicated, but the local wrinkles — different rates for Pittsburgh versus Philadelphia versus a rural township — can make it feel that way. We’ll walk through each calculation step twice, with two concrete examples each time.
The short version: Pennsylvania charges a flat 1% state tax on every property transfer. On top of that, your county and municipality add their own local tax — almost always another 1%, split between the town and the school district. Most Pennsylvania home sales end up at a 2% total tax rate. But major cities charge more: Philadelphia is 4.578%, Pittsburgh is 5%, and Allentown is 2.5% as of January 1, 2026.
Step 1: Add Up the Total Consideration
The tax is not just on the sale price you wrote on the contract. Pennsylvania’s Realty Transfer Tax Act requires the tax to apply to the total consideration paid — meaning the sale price plus any mortgage or debt the buyer is taking over from the seller.[1]
In practical terms: if you pay $300,000 for a house and assume the seller’s remaining $20,000 mortgage, your taxable base is $320,000, not $300,000.
Total Consideration = Sale Price + Assumed Debt
If no debt is assumed, the total consideration is simply the sale price.
Example A — Home purchase, no assumed debt
Example 1 of 2 — Step 1
Simple Sale in Doylestown, Bucks County
You buy a house for $350,000. You’re getting your own new mortgage; you’re not taking over the seller’s loan.
Total Consideration = $350,000 + $0 = $350,000
Taxable Base: $350,000
Example B — Purchase with assumed debt
Example 2 of 2 — Step 1
Sale with Assumed Mortgage in Lower Makefield Township
You buy a property for $350,000 and agree to take over the seller’s existing mortgage of $50,000.
Total Consideration = $350,000 + $50,000 = $400,000
Taxable Base: $400,000
Step 2: Look Up the Tax Rates for Your Location
Once you know your taxable base, you need three numbers: the state rate, the municipal rate, and the school district rate. The state rate is always 1.000%, fixed by law and the same everywhere in Pennsylvania.[2] The local rates vary by municipality.
Most Pennsylvania townships and boroughs split a 1% local tax evenly: 0.5% to the municipality and 0.5% to the school district, making the standard combined rate 2.000%. But several cities set their own higher rates by local ordinance:
| Location | State | Municipal | School | Total |
|---|---|---|---|---|
| Most PA Townships & Boroughs | 1.000% | 0.500% | 0.500% | 2.000% |
| City of Philadelphia | 1.000% | 3.578% | 0.000% | 4.578% |
| City of Pittsburgh | 1.000% | 3.000% | 1.000% | 5.000% |
| City of Allentown | 1.000% | 1.000% | 0.500% | 2.500% |
| State College Borough | 1.000% | 1.500% | 0.500% | 3.000% |
Philadelphia’s 4.578% rate took effect on July 1, 2025, raised from the prior 4.278%.[3] Pittsburgh’s 5% rate has been in effect since February 1, 2020.[4] Allentown’s 2.5% rate became effective January 1, 2026.[3]
Example A — Standard township rate lookup
Example 1 of 2 — Step 2
Doylestown Borough, Bucks County
Doylestown follows the typical Pennsylvania structure. You look up the rates and find:
State: 1.000% + Municipal: 0.500% + School: 0.500% = Total: 2.000%
Total Rate: 2.000%
Example B — High-rate city rate lookup
Example 2 of 2 — Step 2
City of Pittsburgh, Allegheny County
Pittsburgh charges a city rate of 3.000% plus a school district rate of 1.000%, on top of the state’s 1.000%:
State: 1.000% + City: 3.000% + School: 1.000% = Total: 5.000%
Total Rate: 5.000%
Step 3: Check Whether the Transfer is Exempt
Before doing any multiplication, you must ask: does this transfer qualify for an exemption? Pennsylvania law (61 Pa. Code §91.193) lists many transfers that are completely free from transfer tax — both the state portion and the local portion.[5][6] If any exemption applies, the tax is $0 and no further calculation is needed.
There is also an automatic exemption for any transfer where the total consideration is $100 or less.[7]
The most commonly used exemptions include:
- Transfers between spouses — fully exempt
- Parent to child (or stepchild) gifts — fully exempt
- Between siblings — fully exempt
- Between any lineal ascendants and descendants (grandparent to grandchild, etc.) — fully exempt
- Divorce or court-ordered property division — exempt between former spouses
- Transfer by will or inheritance — exempt for heirs receiving property
- Division-in-kind of inherited property — exempt among co-heirs
- Government transfers and eminent domain — exempt
- Mortgage foreclosure or deed-in-lieu of foreclosure — exempt for the lender[8]
- Bankruptcy transfers under a confirmed court plan — exempt
- Religious and qualifying nonprofit organizations — exempt
- Family farm transfers to or from a qualified family farm corporation — exempt
Important note: Even if a transfer is exempt, you may still need to file a PA Form REV-183 (Statement of Value) when recording the deed. This form explains to the county recorder why no tax is being paid. It is required whenever the deed states no sale price, or an exemption is being claimed.[9]
Example A — Taxable transfer (no exemption)
Example 1 of 2 — Step 3
Arm’s-Length Home Sale in Philadelphia
An unrelated buyer purchases a condominium from an unrelated seller for $250,000. No family relationship, no foreclosure, no government involvement. Consideration is well above $100.
Exemption check: None applies → Proceed to calculate tax
Status: Taxable — continue to Steps 4–8
Example B — Fully exempt family transfer
Example 2 of 2 — Step 3
Parent Gifts Home to Child in Allegheny County
A parent transfers a $300,000 home to their adult child for no money. This is a transfer between a lineal ascendant and descendant — a recognized exemption under 61 Pa. Code §91.193(6).[6]
Exemption: Lineal Ascendant/Descendant → Tax = $0
Total Tax Due: $0.00 (REV-183 required at recording)
Step 4: Calculate the State Transfer Tax
If the transfer is not exempt, you calculate each portion of the tax separately, starting with the state. The state tax is always exactly 1% of the total consideration.[1][2]
State Tax = Total Consideration × 0.01 (i.e., × 1%)
Example A — State tax on a modest sale
Example 1 of 2 — Step 4
$150,000 Home Sale, Bellefonte Borough, Centre County
Total consideration (Step 1) is $150,000.
State Tax = $150,000 × 0.01 = $1,500.00
State Tax: $1,500.00
Example B — State tax on a Philadelphia sale
Example 2 of 2 — Step 4
$250,000 Condo Sale, City of Philadelphia
Total consideration is $250,000. The state rate is the same regardless of city.
State Tax = $250,000 × 0.01 = $2,500.00
State Tax: $2,500.00
Step 5: Calculate the Municipal Transfer Tax
Next, you apply the municipality’s rate to the same total consideration. In most places, this is 0.5%. In high-rate cities, it can be much more.
Municipal Tax = Total Consideration × Municipal Rate
Example A — Standard township municipal tax
Example 1 of 2 — Step 5
$350,000 Sale, Doylestown Borough (0.5% Municipal Rate)
Total consideration from Step 1 is $350,000.
Municipal Tax = $350,000 × 0.005 = $1,750.00
Municipal Tax: $1,750.00
Example B — High-rate city municipal tax
Example 2 of 2 — Step 5
$250,000 Sale, City of Philadelphia (3.578% Municipal Rate)
Philadelphia’s city rate is 3.578% — the largest single component in the calculation.[3]
Municipal Tax = $250,000 × 0.03578 = $8,945.00
Municipal Tax: $8,945.00
Step 6: Calculate the School District Transfer Tax
The third and final rate component is the school district’s share. In most Pennsylvania municipalities, the school district receives 0.5%. Some cities (like Philadelphia) fold school tax into a single city rate with no separate school portion; others (like Pittsburgh) levy a distinct 1% school tax.[4]
School Tax = Total Consideration × School Rate
Example A — Standard 0.5% school tax
Example 1 of 2 — Step 6
$350,000 Sale, Doylestown Borough (0.5% School Rate)
School Tax = $350,000 × 0.005 = $1,750.00
School Tax: $1,750.00
Example B — 1% Pittsburgh school tax
Example 2 of 2 — Step 6
$100,000 Sale, City of Pittsburgh (1.0% School Rate)
Pittsburgh’s school district charges a full 1%, which is double the typical statewide school rate.
School Tax = $100,000 × 0.01 = $1,000.00
School Tax: $1,000.00
Step 7: Add Municipal and School Tax to Get Local Tax
The municipal and school taxes together make up the “local” portion of the transfer tax. This is what goes to your local government — as opposed to the state’s share.
Local Tax = Municipal Tax + School Tax
Example A — Local tax in Doylestown
Example 1 of 2 — Step 7
$350,000 Sale, Doylestown Borough
Municipal tax (Step 5) was $1,750.00. School tax (Step 6) was $1,750.00.
Local Tax = $1,750.00 + $1,750.00 = $3,500.00
Local Tax: $3,500.00
Example B — Local tax in Pittsburgh
Example 2 of 2 — Step 7
$100,000 Sale, City of Pittsburgh
Municipal (city) tax: $3,000.00 (3% × $100,000). School tax: $1,000.00 (1% × $100,000).
Local Tax = $3,000.00 + $1,000.00 = $4,000.00
Local Tax: $4,000.00
Step 8: Add State and Local Tax to Get the Final Total
The final step is straightforward: combine the state tax (Step 4) with the local tax (Step 7). This is the total transfer tax due at closing.
Total Tax = State Tax + Local Tax
Both the buyer and the seller are jointly and severally liable for this tax under Pennsylvania law.[2][10] In practice, the parties usually decide at the time of contract who pays which portion — sellers often pay the state portion, buyers pay the local portion, or it is split 50/50. But if either party fails to pay, the other can be held responsible by the state.
The tax is collected by the county Recorder of Deeds when the deed is recorded. The deed will not be recorded until the tax is paid.[11]
Example A — Final total in Doylestown
Example 1 of 2 — Step 8
$350,000 Sale + $50,000 Assumed Debt, Doylestown Borough
Total consideration: $400,000. State tax: $4,000. Local tax: $4,000.
Total Tax = $4,000.00 + $4,000.00 = $8,000.00
Total Transfer Tax Due: $8,000.00 (2.000% of $400,000)
Example B — Final total in Pittsburgh
Example 2 of 2 — Step 8
$100,000 Home Sale, City of Pittsburgh
State tax: $1,000. Local tax: $4,000 (city $3,000 + school $1,000).
Total Tax = $1,000.00 + $4,000.00 = $5,000.00
Total Transfer Tax Due: $5,000.00 (5.000% of $100,000)
What Happens When There’s No Sale Price?
Not every deed transfer has a stated dollar amount — think of a gift between family members that isn’t exempt, a transfer into a trust, or a deed that recites only nominal consideration. In these cases, Pennsylvania law says the tax must still be paid on the property’s actual monetary worth, calculated using a method called the Common Level Ratio (CLR).[1][12]
The formula is: find the property’s assessed value (from the county tax records), then multiply by the county’s Common Level Ratio (a factor published annually by the PA Department of Revenue that converts the assessed value to market value). The result is used as the taxable base in place of a sale price.
Computed Value = Assessed Value × Common Level Ratio (CLR)
Tax = Computed Value × Total Rate
CLR values differ by county and are updated every year. Check the Pennsylvania Department of Revenue website for the current year’s ratios before using this method.
Paying the Tax: Forms, Deadlines, and Where the Money Goes
Transfer tax is collected at the time of deed recording — you cannot record a deed in Pennsylvania without paying the tax first. The county Recorder of Deeds handles collection and remits the state’s 1% share to the Department of Revenue.[11]
For Philadelphia specifically, payment can also be made online through the Philadelphia Tax Center or within 30 days of recording.[3]
When no sale price is stated, or when an exemption is being claimed, the deed must be accompanied by a completed PA Form REV-183 (Statement of Value). This form tells the recorder what the property is worth (using the CLR method) or explains why an exemption applies.[9]
Disclaimer: This article is for general educational purposes only. Tax rates, exemptions, and local ordinances change frequently. Nothing here constitutes legal or tax advice. Always verify current rates with the Pennsylvania Department of Revenue, your county Recorder of Deeds, or a licensed real estate attorney before closing. When in doubt, consult a professional.
Sources & References
- Pennsylvania Department of Revenue — Realty Transfer Tax Overview and Taxable Base. PA Dept. of Revenue guidance (61 Pa. Code §91.112). The state tax is 1.0% on consideration paid, including assumed debt. revenue.pa.gov
- Pennsylvania Realty Transfer Tax Act, 72 P.S. §§3283–3292. Establishes the 1% state rate and joint and several liability of grantor and grantee.
- City of Philadelphia Department of Revenue — Realty Transfer Tax Rate Update. Philadelphia’s combined rate increased to 4.578% (3.578% city + 1.0% state) effective July 1, 2025. Allentown’s rate increased to 2.5% effective January 1, 2026. phila.gov
- Allegheny County Recorder of Deeds / City of Pittsburgh — Pittsburgh’s total transfer tax of 5.0% (3.0% city + 1.0% state + 1.0% school district) has been in effect since February 1, 2020.
- 61 Pa. Code §91.193 — Excluded Transactions. Pennsylvania’s full list of realty transfer tax exemptions, including family transfers, government transfers, foreclosures, bankruptcies, nonprofits, and low-value transfers.
- 61 Pa. Code §91.193(6) — Family Transfers. Transfers between spouses, parents and children, siblings, and lineal ascendants/descendants are exempt. The deed must state the relationship.
- 61 Pa. Code §91.193(6)(j) — Any transfer where the total consideration is $100 or less is exempt from realty transfer tax.
- 61 Pa. Code §91.193 — Foreclosure Exemption. Transfers under judicial mortgage foreclosure to the holder of a bona fide mortgage in default are exempt. See also 25 Pa. Code (county recorder guidance).
- PA Department of Revenue Form REV-183 — Statement of Value. Required when a deed is recorded without a stated sale price or when an exemption from transfer tax is claimed. Available at revenue.pa.gov.
- Pennsylvania Department of Revenue — Transfer Tax FAQ. Both buyer (grantee) and seller (grantor) are jointly and severally liable. Parties may agree to divide liability by contract.
- County Recorders of Deeds across Pennsylvania — The transfer tax is paid at the time of deed recording. The deed is not recorded until the tax is remitted. The recorder collects and remits the state’s 1% share.
- Pennsylvania Department of Revenue — Common Level Ratios (CLR). Published annually for all 67 counties. Used to calculate market value from assessed value for non-arm’s-length or non-sale transfers. Available at revenue.pa.gov.
- Centre County (PA) Tax Data — Municipal transfer tax rates for Centre County jurisdictions, including State College Borough (3.0% total) and Taylor Township (1.5% total). Data from Centre County Assessment Office (reference year 2020, verified for general structure).
- Pennsylvania Code Title 61, Chapter 91 — Realty Transfer Tax. Full implementing regulations, last significant update noted August 30, 2025. pacodeandbulletin.gov