Learn about transfer tax in Pittsburgh: a quick guide

Do you want to sell your Pittsburgh home? You may have questions about Pittsburgh transfer taxes, such as “What?” and “Who pays for it?”

Don’t worry. Transfer taxes are not complicated, but they do have some quirks and it’s important to work before you sell your home as they can impact your bottom line and closing costs.

This short guide will help uncover the mystery of Pittsburgh transfer tax, take charge of payments and more.

What is transfer tax?

When property ownership is transferred from one person to another, state or local governments transfer taxes to real estate.

According to the Federal Trade Commission, ownership of the property is formally passed on to a new owner (essentially a document that confirms your legal ownership).

The amount of transfer tax you owe may vary greatly depending on the location of the property. Different states, counties and cities often have their own unique rates and regulations for these taxes, so it’s nice to know how they work in your area.

Transfer tax is primarily a means by which local and state governments generate revenue and fund various public service and infrastructure projects.

Who pays the transfer tax?

In Pennsylvania and Pittsburgh, transfer taxes are distributed between buyer and seller (sometimes referred to as “grantee” and “grantor”).

What is the type of transfer tax?

Transfer taxes usually vary according to local regulations, but can usually be divided into three types according to state status: state, city, and county. This is how Pittsburgh works.

National transfer tax

For real estate transfers in Pennsylvania, a documentary transfer tax was applied for a 1% home value. However, depending on your specific location within Pennsylvania, additional taxes may apply.

City transfer tax

The city transfer tax rate in Pittsburgh is 3% of the value of the property’s sales. Real estate turnover in the Pittsburgh school district also applies to a 1% tax. The state tax of 1% also applies, increasing the total transfer tax on Pittsburgh real estate transactions to 5%.

Other transfer fees

In addition to transfer tax, other expenses need to be considered, such as those of homeowners’ associations or local neighborhood organizations. As these may vary depending on location, it is recommended to consult a professional.

If you sell your home without a real estate agent, seeking professional advice may shed light on some of the nuances of the process and better understand expectations about the pros and cons of selling your home without a real estate agent.