Taxes

1. What is the Real Estate Transfer Tax
2. Who pays the Transfer Tax?
3. Are any transactions exempt?
4. What is a Statement of Value?
5. When is  a Statement of Value necessary?
6. Why is additional Transfer Tax sometimes due?
7. How is additional tax paid?

1. What is the Real Estate Transfer Tax
   There is a State Tax and a Municipal Tax each amounting to 1% of the value of the property or interest being conveyed.  (This is not necessarily the sales price.)
   
   
2. Who pays the Transfer Tax?
   The state and the local governments do not care who pays it as long as it is paid.  The Recorder of Deeds office will not accept a deed unless the tax is paid at the time of the recording.  On most sales agreements, the seller and the buyer split the tax.  However, the new owner is responsible if there is any question over the amount of the tax paid.
   
   
3. Are any transactions exempt?
   Some are, for example, conveyances between husband and wife, parent and child, grandparent and grandchild, and brother and sisters.  There are some other exemptions allowed in certain situations.  It is best to consult your attorney or contact our office concerning them.  Note that non-profit corporations are NOT exempt.  In most cases, such transactions are taxable.
   
   
4. What is a Statement of Value?
   This is a specified State form that is used either to set the value of the property being conveyed or to give the reason for exemption.  They must be presented in duplicate and are forwarded to the Department of Revenue. You will need the COMMON LEVEL RATIO for Beaver County to properly complete this form.   (To print or view the forms properly, you need Adobe Reader , which can be downloaded at no charge.)
   

5. When is  a Statement of Value necessary?
   Anytime the transfer tax is not paid or anytime the true value of the land is not shown on the deed (such as in a $1.00 consideration). State investigators then check the property and see if the value is as stated or if the reason given for exemption is valid.
   
   

6. Why is additional Transfer Tax sometimes due?
   This happens when the Pennsylvania Department of Revenue investigator determines the property being sold is worth more than stated or if the reason for exemption is not valid per Pennsylvania Law.
   
   
7. How is additional tax paid?
   A "Determination" is sent directly to you by the State Department of Revenue.  The additional State Tax and interest is paid to them.  They issue a receipt to our office.  Normally a matching amount of Municipal Tax is also due.  This is paid by bringing the original deed to our office with a check for that amount.  We will then affix the State Receipt.  The deed is then re-recorded for the usual fees.
   
   

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