If the transfer tax is set at 1% of the sale price, who is typically liable for the tax?

If the transfer tax is set at 1% of the sale price, who is typically liable for the tax?

• A. The seller only
• B. The buyer only
• C. Both parties, unless otherwise negotiated
• D. The real estate agent

Answer: (C)

The correct answer is that both parties are typically liable for the transfer tax unless otherwise negotiated. In Pennsylvania, real estate transfer tax is commonly a shared responsibility between the buyer and the seller. It's important to note that this arrangement can vary based on local customs, agreements made during negotiations, or specific terms outlined in the sale contract. In many transactions, the seller might agree to pay the transfer tax as part of the closing costs to facilitate the sale. However, in other cases, the buyer may take on this expense. The possibility of negotiating who pays the transfer tax provides flexibility in transactions, which can be advantageous in competitive markets or when trying to finalize agreements. Ultimately, clear communication and agreement on this aspect are vital to ensure all parties are informed and in alignment regarding their financial responsibilities related to the tax.

The correct answer is that both parties are typically liable for the transfer tax unless otherwise negotiated. In Pennsylvania, real estate transfer tax is commonly a shared responsibility between the buyer and the seller. It's important to note that this arrangement can vary based on local customs, agreements made during negotiations, or specific terms outlined in the sale contract.

In many transactions, the seller might agree to pay the transfer tax as part of the closing costs to facilitate the sale. However, in other cases, the buyer may take on this expense. The possibility of negotiating who pays the transfer tax provides flexibility in transactions, which can be advantageous in competitive markets or when trying to finalize agreements. Ultimately, clear communication and agreement on this aspect are vital to ensure all parties are informed and in alignment regarding their financial responsibilities related to the tax.