The Philadelphia realty transfer tax is 4.578% of the sale price. That total combines a 3.578% City of Philadelphia tax and a 1% Commonwealth of Pennsylvania tax. The City published this combined rate after its portion rose on July 1, 2025 (City of Philadelphia; Saul Ewing).
At 4.578%, the tax on a $400,000 Philadelphia home is $18,312. By custom, buyer and seller each pay half. The law doesn’t require that split, though, and it’s one of the larger lines on any Philadelphia closing statement.
This guide covers the current rate, how to calculate the tax, who usually pays, the main exemptions, and how the tax fits with your other closing costs. It’s general education, not tax or legal advice.
Key takeaways
- The current Philadelphia transfer tax rate is 4.578% (3.578% City plus 1% state), in effect since July 1, 2025.
- To calculate it, multiply the sale price (the “actual consideration”) by 0.04578.
- Buyer and seller usually split the tax 50/50. That’s a custom only, and the City can collect the full amount from either party.
- Some family transfers are exempt with proper documentation. Transfers under a will may or may not be exempt.
What is the Philadelphia realty transfer tax?
The realty transfer tax applies when ownership of real estate changes hands. In Philadelphia, two governments each charge their own layer:
- The Commonwealth of Pennsylvania charges 1% statewide (PA Department of Revenue).
- The City of Philadelphia adds 3.578% on top.
The City lists both layers on its realty transfer tax page and shows the formula as Actual Consideration × 0.04578. In most sales, “actual consideration” means the purchase price.
The July 2025 rate increase
On July 1, 2025, Philadelphia raised its share of the tax by 0.3 percentage points, to 3.578%. According to Saul Ewing, the change came through Bill No. 250211, part of the City’s FY2026 budget. The added revenue is meant to fund Mayor Parker’s HOME housing initiatives.
That brought the combined City and state rate from 4.278% to 4.578%. On a $400,000 sale, the increase adds $1,200 to the total tax bill.
If your contract was signed before mid-2025, or you’re reading an older estimate or net sheet, check that the math uses 4.578%.
How to calculate Philadelphia transfer tax
The formula is short:
Sale price × 0.04578 = total realty transfer tax
To see each layer on its own, multiply the price by 0.03578 for the City portion and by 0.01 for the state portion.
Worked examples (hypothetical)
The table below uses round, hypothetical sale prices at the current 4.578% total rate. Your actual figures will depend on your contract price and closing documents.
| Sale price (hypothetical) | City share (3.578%) | State share (1%) | Total tax (4.578%) | Each side if split 50/50 |
|---|---|---|---|---|
| $300,000 | $10,734 | $3,000 | $13,734 | $6,867 |
| $400,000 | $14,312 | $4,000 | $18,312 | $9,156 |
| $500,000 | $17,890 | $5,000 | $22,890 | $11,445 |
One party pays all vs. a 50/50 split
Take the hypothetical $400,000 sale:
- Customary split: the buyer pays $9,156 and the seller pays $9,156.
- Seller pays all: the seller pays $18,312, and the buyer pays $0 in transfer tax.
- Buyer pays all: the buyer pays $18,312, and the seller pays $0.
Either side can end up with a $9,156 difference, so read the transfer tax clause in your agreement of sale before you sign it.
Who pays the transfer tax in Philadelphia?
The City says the tax is usually split evenly between buyer and seller. It also says the split is not a legal requirement. The parties can agree to any division in the sales contract.
The City can collect the tax from either party. If the seller’s half goes unpaid, the City can come after the buyer. That’s why buyers and their title companies usually make sure the full tax is paid at closing.
The tax is due within 30 days after the real estate is acquired. In a typical sale, the title company collects it at settlement and pays it when the deed is recorded.
Can the split be negotiated?
Yes. Since the 50/50 split is only a custom, it can be part of your negotiation like price, repairs, or closing date. A seller with several offers may ask the buyer to cover more of the tax. A seller who wants a quick sale may agree to cover more of it. Your agent and attorney can help you weigh that trade against the price and other terms.
Exemptions and special cases
The City lists several situations where the tax may not apply, or where it’s calculated differently. These are general summaries. Exemptions depend on the facts and the paperwork, so confirm your situation with a title company or attorney.
Family transfers
Transfers between spouses and between direct ascendants or descendants (such as parent to child, or grandchild to grandparent) can be exempt. You’ll need documentation showing the relationship.
Transfers under a will
Property passing under a will can be exempt, but not always. The City notes that the tax may still apply if mortgages, liens, or other debts remain on the property. An estate that sells to one heir may also still owe the tax.
Transfers without a clear sale price
Some transfers aren’t arm’s-length sales, or they have no clear price. In those cases the City can calculate the tax on a computed value: the property’s assessed value from the Office of Property Assessment (OPA), multiplied by the Common Level Ratio, then multiplied by 0.04578.
How transfer tax fits into Pennsylvania closing costs
For many Philadelphia buyers and sellers, transfer tax is the biggest closing cost after any agent commission. Buyers also have title insurance, lender fees, recording fees, and prepaid items. For a full list, see our guide to closing costs in PA for home buyers.
A few planning tips:
- Buyers: Add your share of transfer tax to your cash-to-close estimate early. Lenders don’t finance it the way they finance the purchase price.
- Sellers: Include your share in your net sheet alongside your payoff, commission, and other costs. At a 4.578% combined rate, it can noticeably change what you walk away with.
- New owners: After closing, look into the Pennsylvania homestead exemption, which can lower the property tax on your primary residence going forward.
If you’re moving to the city and comparing neighborhoods or costs, our guide on whether to move to Philadelphia covers the bigger picture. If you’re also looking across the river, New Jersey has its own sale-based charge, explained in our NJ mansion tax guide.
Commission is the other big seller cost, and sellers who want to keep more of their equity can compare lower-commission options in Pennsylvania.
Frequently asked questions
What is the Philadelphia transfer tax rate in 2026?
The total rate is 4.578%: 3.578% to the City of Philadelphia and 1% to the Commonwealth of Pennsylvania. This rate has been in effect since July 1, 2025, according to the City of Philadelphia.
Does the buyer or seller pay transfer tax in Philadelphia?
Usually both, split 50/50. The split is a custom, and the law doesn’t require it. The parties can agree to a different division in the contract, and the City can collect the full tax from either side.
How do I calculate transfer tax on a Philadelphia home?
Multiply the sale price by 0.04578. For a hypothetical $300,000 sale, the total is $13,734, or $6,867 per side under an even split.
When is the Philadelphia realty transfer tax due?
The City says it’s due within 30 days after the property is acquired. In most sales, it’s collected and paid at closing through the title company.
Are transfers between family members exempt?
Transfers between spouses, and between parents, children, grandparents, and grandchildren (direct ascendants and descendants), can be exempt with proper documentation. Transfers under a will may be exempt, but not when debts or liens remain or in some estate sales to an heir. Confirm your specific case with a title professional or attorney.
