Skip to content

Philadelphia Realty Transfer Tax When You Sell the Building

Details checked November 9, 2026

Some Philadelphia owners hold their building inside the company, and Philadelphia Business Brokers Core hears from sellers who forget the transfer tax until the closing statement arrives.

It is one of the highest in the state.

Prefer to talk? Phone (215) 555-0158 on a weekday.

A business owner and an attorney review a property deed and closing statement at a desk
Who handles it
The Philadelphia Department of Revenue, together with the Pennsylvania Department of Revenue for the state share
What gets filed
A realty transfer tax payment tied to the deed and its recorded price, with a CPA and attorney confirming how the deal is structured
Timing
Due when the deed is recorded, so build it into the closing statement from the start

Watch for: Assuming a sale of company shares avoids the tax. Rules can reach the sale of an entity that owns real estate, so ask before you structure the deal.

This guide is general information and is not tax or legal advice. Confirm every step with your CPA, your attorney and the Philadelphia Department of Revenue.

What the Tax Is

Pennsylvania charges a state realty transfer tax, and Philadelphia adds its own on top. Since July 2025 the combined rate in the city has been reported at 4.578 percent of the price, with the city share rising to 3.578 percent.

Confirm the current rate before closing, since local rates have changed more than once.

Who Usually Pays

The contract decides, and buyers and sellers commonly split it. Pay attention to the wording so a surprise bill does not land on you at the table.

When the Building Sits Inside the Company

If your company owns the building, selling the real estate can trigger the tax on the sale price. Rules can also reach the sale of an entity that holds real estate, so selling shares does not always avoid it.

That is a reason to decide early whether the building sells with the business, sells separately or stays with you as a landlord.

Options Owners Weigh

  • Sell the business and the building to one buyer.
  • Sell the business and keep the building as landlord to the new owner.
  • Sell the building to an investor and lease it back to the buyer.
  • Hold the building and rent it out for income.

What to Gather

Collect the deed, a recent appraisal or broker opinion of value, the draft closing statement and your entity documents. Your attorney can then show how the tax lands under each structure.

Do this before the letter of intent so the numbers inform the price rather than argue with it.

Why Appraisals Matter

The tax is figured on the price or on a computed value when no price exists. Documented value helps if the city questions a low deed price, and it helps you set a fair split between business and building.

Steps for Sellers

  1. Get a market rent review and a value for the building.
  2. Ask your attorney how each structure affects the transfer tax.
  3. Ask your CPA how it changes your income tax.
  4. Put the tax split in the letter of intent, not the final contract.

Business buyers often cannot buy the building too, which makes a lease important. Read what happens to your lease, then request a valuation. The paper trail guides cover the rest.

Tap to call (215) 555-0158