Real Estate Transfer Tax: Rates, Who Pays, and the Wholesaler’s Double-Close Math

A real estate transfer tax is a one-time tax a state, county, or city charges when ownership of real property changes hands, usually figured as a percentage of the sale price and collected when the deed is recorded. Who pays it, how much it costs, and whether it applies at all depends on the state and often the city, from zero in Texas to more than 4.5% of the price in Philadelphia.

For wholesalers, the tax matters for a reason most guides skip: the way you structure your exit decides how many times it gets charged. An assignment usually means one deed. A double close means two deeds and, in most places, two transfer taxes. This guide covers how the tax works, a verified seven-state rate table, and the math that tells you which exit actually keeps more money in your pocket.

What a transfer tax is (and the other names it goes by)

The government taxes the document that moves an interest in real estate from one party to another. The deed is the usual trigger, but some states also reach long-term leases, transfers of entities that own property, and even contracts to buy property. The name varies: realty transfer tax in Pennsylvania and Delaware, documentary stamp tax (“doc stamps”) in Florida, documentary transfer tax in California, real estate excise tax (REET) in Washington, and the transfer tax plus “mansion tax” in New York.

It is not property tax, which you pay every year, and it is not an income tax on your profit. It is a toll on the transfer itself, owed whether the deal made money or not.

Who pays: statute, custom, and your contract

The statute says who the government can collect from. New York puts the basic tax on the grantor (seller), and the buyer pays only if the seller does not or is exempt, according to the New York Department of Taxation and Finance. Pennsylvania holds grantor and grantee jointly and severally liable. Florida’s Department of Revenue says all parties are liable for doc stamps regardless of which one agreed to pay. Delaware’s statute apportions the tax equally between grantor and grantee.

Local custom decides who usually pays in practice. In Pennsylvania, buyer and seller customarily split the tax. In California, the seller usually pays the county tax. In Washington, the Department of Revenue says the seller typically pays.

Your contract can usually override custom. If you buy from a motivated seller on a contract that says “buyer pays all closing costs,” you just volunteered to pay a tax custom would have split or put on the seller. Our guide on how to write a wholesale offer covers how to word the closing-cost clause.

How real estate transfer tax is calculated

1. Find the taxable value. Usually the full consideration, not just the cash. Florida counts money paid plus the balance of any mortgage on the property, whether assumed or not. Pennsylvania’s regulation includes existing liens that stay on the property. That matters for subject-to deals, where “no cash changed hands” does not mean no tax.
2. Convert the rate. Rates come per $100 (Florida), per $500 (New York, California counties), per $1,000 (California cities), or a straight percentage (Pennsylvania, Delaware, Washington).
3. Watch the rounding. Florida charges on each $100 “or portion” and New York on each $500 “or fractional part,” so a $200,050 price is taxed as if it were $200,100 in Florida and $200,500 in New York.
4. Stack the layers. Add state, county, and city taxes. In Pennsylvania the local portion can be bigger than the state’s 1%.
5. Apply brackets. Washington and some California cities use graduated rates.

A quick example: a $250,000 sale in Florida outside Miami-Dade is 2,500 units of $100, times $0.70, for $1,750 in doc stamps. The same price in a Pennsylvania town with the common 1% local rate is $250,000 x 2% = $5,000.

Transfer tax rates in seven states, compared

Rates below were verified against state and local sources as of October 2026. Local rates change often, so confirm the figure for the specific address with the title company before you set a price.

State	State-level rate	Local add-ons	Who pays (statute or custom)
Texas	None	None; the state constitution bars a transfer tax on conveyances of fee simple title (with narrow exceptions)	N/A
Pennsylvania	1%	Usually 1% (higher in some towns); Philadelphia city rate 3.578%, for 4.578% combined since July 1, 2025	Both jointly liable; customarily split 50/50
New York	$2 per $500 (0.4%); plus 1% “mansion tax” on residential sales of $1 million or more	NYC adds its own transfer tax (1% residential up to $500,000, 1.425% above) and extra state taxes at $2M+ and $3M+	Seller pays base tax; buyer pays mansion tax
Florida	$0.70 per $100	Miami-Dade: $0.60 per $100, plus a $0.45 surtax unless the deed transfers only a single-family residence	All parties liable; negotiated
California	None at state level	County $1.10 per $1,000; cities may add half the county rate, and charter cities can charge far more (City of Los Angeles: $4.50 per $1,000, plus Measure ULA on high-end sales)	Seller usually pays the county tax
Washington	Graduated: 1.1% / 1.28% / 2.75% / 3%	Local REET often added by cities and counties	Seller typically pays
Delaware	2.5% where the full local tax applies (3% otherwise)	Up to 1.5%, for 4% total	Split equally by statute

Details behind the table

Washington. Under RCW 82.45.060, each rate applies to a slice of the price. Through December 31, 2026, the brackets are 1.1% up to $525,000, 1.28% to $1,525,000, 2.75% to $3,025,000, and 3% above. The statute re-indexes the thresholds every four years, next on January 1, 2027, so check the Department of Revenue for 2027 closings. Neither the 2025 nor 2026 session changed the rates.

Philadelphia. The city raised its portion to 3.578% on July 1, 2025, according to the City of Philadelphia. With the state’s 1%, that is 4.578% of the price.

California. The county rate comes from Revenue and Taxation Code section 11911: $0.55 per $500, applied only when consideration exceeds $100. The Los Angeles County Registrar-Recorder lists the City of Los Angeles at $4.50 per $1,000, with Measure ULA adding 4% on sales over $5.4 million and 5.5% at $10.9 million or more as of July 1, 2026.

Assignment vs. double close: how the structure changes the tax bill

In an assignment, you sell your contract rights to the end buyer. The original seller deeds the property straight to that buyer. One deed, recorded once.

In a double close, you actually buy the property (deed one: seller to you) and then sell it (deed two: you to end buyer), often the same day with transactional funding. Two deeds means the transfer tax is generally charged twice: once on your purchase price and again on your resale price. The privacy a double close buys you has a price in high-tax states.

Pennsylvania: the assignment fee stays out of the taxable value

Pennsylvania’s regulation on bona fide sales, 61 Pa. Code § 91.132, says the value of a transfer from the seller does not include consideration paid by the buyer’s assignee. Its own example: a $100,000 contract assigned for $1 million is taxed at $100,000. The exception is when the seller or the seller’s affiliate shares in the assignment payment. Then that share is added. So in Pennsylvania, a clean assignment to an unrelated end buyer is taxed on your contract price, while a double close is taxed on both deeds.

New York: the contract itself can be a taxable interest

New York goes the other way. Its Tax Law defines an “interest in real property” to include an option or contract to purchase, lists “assignment” among the ways a conveyance can happen, and counts payment for a contract as consideration. Only the original execution of a contract to sell, without use or occupancy, is listed as nontaxable. The state’s Publication 577 on the mansion tax uses a wholesaler-style example: A contracts to sell to B for $900,000, B assigns the contract to C for $200,000, and if the parties are unrelated and nothing was structured to dodge the tax, the closing and the assignment are treated as two separate conveyances. Plan for your assignment fee to be a reportable conveyance and ask the title company how they will file it.

Florida, California, and Washington: count the deeds

Here the deed is the taxable event, so a double close produces a second full tax on the resale price. Florida doc stamps also reach contracts for deed. Florida’s consideration rule is broad and its regulation does not specifically address assignment fees, so ask the closing agent how they will compute stamps.

Worked example: one deal, two exits, two states

HYPOTHETICAL. You put a house under contract at $200,000 and find a cash buyer at $230,000, a $30,000 spread. We will run it in a Pennsylvania town with the common 1% local rate (2% total) and in upstate New York (0.4%, no NYC taxes, under the $1 million mansion threshold). Pennsylvania assumes the customary 50/50 split; New York follows the statute, with the grantor paying.

HYPOTHETICAL	PA assignment	PA double close	NY assignment	NY double close
Taxed transfers	Deed at $200,000	Deeds at $200,000 and $230,000	Deed at $200,000; assignment at $30,000	Deeds at $200,000 and $230,000
Total tax generated	$4,000	$8,600	$920	$1,720
Your share	$0 (seller and end buyer split)	$4,300 ($2,000 as buyer + $2,300 as seller)	$120 (you are grantor of the contract)	$920 (you are grantor on deed two)
Your spread after transfer tax	$30,000	$25,700	$29,880	$29,080

Two lessons jump out. First, in Pennsylvania, the double close costs you $4,300 in tax alone before you pay transactional funding fees and a second set of title charges. That is more than 14% of your fee. Run the same deal in Philadelphia at 4.578% and the second deed alone generates $10,529.40 of tax. Second, in New York the structure barely matters for transfer tax at this price, so the decision should turn on privacy, buyer financing, and closing costs, not the tax.

Where the tax lands on the settlement statement

On a financed purchase, the Closing Disclosure has a section called “Taxes and Other Government Fees.” Under 12 CFR 1026.38(g)(1), recording fees go on the first line, and the following lines itemize each transfer tax along with the government entity charging it. Cash deals usually close on an ALTA or title company settlement statement with similar line items.

What to check on every statement, as covered in our guide to reading a settlement statement:

• Each layer (state, county, city) is listed and charged to the party your contract names.
• The taxable value matches the deed consideration. On an assignment, look at whether your fee was added to the base.
• On a double close, both statements show tax you pay; add them together.
• When you present a cash offer to a seller, show their share of the tax on a seller net sheet so their bottom line doesn’t shrink by surprise at the closing table.

Putting transfer tax into your MAO

The classic maximum allowable offer formula assumes the end buyer’s cushion absorbs closing costs. In high-tax areas, or when you plan to double close, give the tax its own line:

MAO = (ARV x buyer’s percentage) – repairs – your fee – transfer tax you will pay – other closing and funding costs

HYPOTHETICAL: ARV $330,000 in a 2% Pennsylvania town. Your buyers pay 70% of ARV minus repairs: $231,000 – $40,000 = $191,000. You want a $20,000 fee. On an assignment, your offer can be $171,000. If you expect to double close, you pay half the tax on both deeds. Drop your offer to $160,000 and your share of the tax runs about $3,510 (1% of $160,000 plus 1% of $191,000), leaving roughly $27,500 of spread to cover funding fees and the second set of title charges while still protecting your $20,000. Plug your own numbers into the MAO calculator and add the tax as a cost line.

Decide your exit before you make the offer, and price the second deed in from day one if you may need it.

How the IRS treats transfer taxes for investors

Transfer taxes are not deducted on their own like annual property taxes. Instead, they adjust your cost and your sale proceeds.

• When you buy, transfer taxes you pay are part of your basis. IRS Publication 551 lists “transfer taxes” among the settlement costs included in basis, and also includes amounts the seller owes that you agree to pay.
• When you sell, transfer taxes you pay reduce your amount realized. The authority is 26 U.S.C. § 164(a), which says a tax paid in connection with acquiring property is part of its cost and, on a disposition, a reduction in the amount realized.

For a flipper or a buy-and-hold investor, that means the tax you pay at purchase lowers your taxable gain later, and the tax you pay at sale lowers it now. In a same-day double close, both taxes simply reduce your profit on the flip. How that profit itself is taxed, often as ordinary income for frequent wholesalers, is covered in our guide to wholesale real estate taxes.

Where beginners lose money on transfer tax

• Defaulting to a double close in a high-tax city. In Philadelphia, the second deed can cost more than many wholesale fees. If your only reason is hiding the spread, weigh that against the tax.
• Using a “buyer pays all closing costs” clause without a number. In a 4% Delaware or 4.578% Philadelphia closing, you may have just agreed to pay the seller’s half too.
• Assuming no cash means no tax. Florida counts mortgage balances in consideration, and Pennsylvania counts liens that stay on the property. Subject-to and seller-finance deals still generate tax.
• Copying another state’s rules. A Pennsylvania wholesaler who moves to New York may be surprised that the assignment itself can be a taxable conveyance.
• Structuring around the tax. New York’s own example only treats the assignment as separate when the parties are unrelated and the deal was not structured to avoid tax. Pennsylvania adds the seller’s share of an assignment payment back in. This is a spot where an attorney or title company genuinely needs to review the plan.
• Forgetting local rates and new thresholds. Philadelphia’s rate went up in 2025, Los Angeles moved its ULA thresholds on July 1, 2025 and again on July 1, 2026, and Washington’s brackets reset in January 2027.

Transfer tax FAQ

Is real estate transfer tax deductible?

Not as a standalone deduction. Under section 164(a), you add it to your basis when you buy and subtract it from your amount realized when you sell, so it lowers your taxable gain either way.

Does an assignment of contract trigger transfer tax?

It depends on the state. Pennsylvania’s regulation keeps an unrelated assignee’s payment out of the taxable value, while New York’s law treats a contract to purchase as an interest in real property, so the assignment can be its own taxable conveyance. Ask the title company in each new market.

Keep building your deal math