In Pennsylvania, each time a property trades hands three jurisdictions collect a Deed (or Realty) Transfer Tax, basically a sales tax. There are cases when it does not apply but for most of us, when we buy and/or sell a property, we will owe transfer tax. The Transfer Tax is most often a percentage of the sales price of the property but can be based on the value of the property in some cases. It is collected by the state, the municipality and the school district. Generally the buyer and seller split the fee 50%/50% but it is an item that can be negotiated in a sales contract.
Pennsylvania collects 1% of the sales price of the property in taxes at closing. Most of those taxes are deposited in Pennsylvania’s General Fund, 15 % goes to the Keystone Recreation, Park and Conservation Fund.
The school district and municipalities determine their transfer rates separately. The municipality rate can vary significantly throughout the state (however most local rates are 0.5%) and most school districts charge 0.5%.
The transfer tax on most properties in our region is 2.0%. If you are moving in or out of Taylor Township, your tax bill will be slightly less (1.5%); and if you will be moving in or out of Ferguson Township (2.75%) or State College Borough (3.0%), you will pay more. Check with your Gambone, Songer & Associates’ REALTOR® to find out what the fee will be for you.