Philadelphia Transfer Tax: What is it & How will the increase impact me?
đź“Š What the transfer tax covers & how it works
- It applies to nearly all transfers of real estate within Philadelphia—including sales, 30+ year leases, easements, transfers of entity ownership, gifts, and more
- Typically, buyer and seller split the tax 50/50, though the city can hold either party responsible. The responsibility is part of the agreement of sale and can be a negotiation point to help sweeten the deal for buyer/seller but most often, it is split evenly.
- Tax is due upon presenting the deed for recording or within 30 days of closing
- Late payments can incur penalties up to 50% of the unpaid tax phila.gov.
- Some parties are exempt, provided proper documentation: spouses, parents→children, grandparents→grandchildren, siblings (including half- and step-), life partners, wills/intestate succession, government instruments, nonprofits, religious groups, farmland, and transfers involving nonprofit housing agencies
🏛️ Current tax rates (before July 1, 2025)
- State rate: 1.000%
- City rate: 3.278%
- Total: 4.278%, typically split evenly to about 2.139% each
⬆️ Upcoming changes (effective July 1, 2025)
- City transfer tax increase: from 3.278% → 3.578%, raising the combined rate to 4.578%
- Recording fee hike: flat increases of $3 for deeds, mortgages, assignments/releases, and related documents (e.g., deeds from $274.75 → $277.75)
- Why it matters: This increases the closing costs for homebuyers which could. This fiscal change supports the H.O.M.E. affordable housing program, aiming to build/preserve 30,000 units over 4 years.
đź’¸ Real-world impact of the changes
- Example: On a $400,000 sale:
- Before July 1: 4.278% → $17,112
- After July 1: 4.578% → $18,312
- Difference: +$1,200 in tax alone ($600 each if splitting evenly between buyer and seller)
- Plus, budget an extra $3 per deed/mortgage form at closing.
🧾 Let’s summarize
| Item | Before July 1, 2025 | After July 1, 2025 |
| City transfer tax | 3.278% | 3.578% |
| State transfer tax | 1.000% | 1.000% |
| Total transfer tax | 4.278% | 4.578% |
| Split (buyer/seller) | ~2.139% each | ~2.289% each |
| Recording fee – deed | $274.75 | $277.75 |
| Recording fee – mortgage | $244.75 | $247.75 |
| Other document fees | +$3 each | +$3 each |
âś… Key takeaways
- From July 1, Philadelphia real estate closings will cost more—primarily due to the 0.3 percentage point bump in transfer tax and small admin fee increases.
- These funds will support the city’s affordable housing goals under the H.O.M.E. initiative.
- Be sure to confirm which party covers the tax prior to closing.
- Exemptions still apply for qualifying family transfers, nonprofits, and similar cases—but require the correct affidavit.
🤝 Need personalized insights?
If you’d like help estimating the total costs for your sale or purchase, figuring out if you’re exempt, or planning closing negotiations— contact us with the details and we’ll help crunch the numbers!