Philadelphia's 4.578% Transfer Tax Is the Cash a Physician Loan Misses
Program and regulatory figures verified October 6, 2026. Details change; confirm your scenario with us.
Everything else about buying in Pennsylvania on a physician loan is comparatively easy. This is the part that catches people, and it catches them late.
What exactly is the Philadelphia rate?
The City publishes the components separately, and the total is what matters:
| Component | Rate |
|---|---|
| City of Philadelphia | 3.578% |
| Commonwealth of Pennsylvania | 1% |
| Total | 4.578% |
The base is the sale price or assessed value plus any assumed debt, and the City gives the arithmetic directly: actual consideration multiplied by .04578.
What does that cost in practice?
On Philadelphia's typical home value of $389,524, the full tax is $17,834. Buyer and seller customarily split it evenly, which puts roughly $8,917 on the buyer's side.
| Price | Total at 4.578% | Even split | If the state rate alone applied (1%) |
|---|---|---|---|
| $389,524 | $17,834 | $8,917 | $3,895 |
| $400,000 | $18,312 | $9,156 | $4,000 |
| $500,000 | $22,890 | $11,445 | $5,000 |
| $600,000 | $27,468 | $13,734 | $6,000 |
The last column is the point. On a $400,000 purchase, Philadelphia's city component alone adds $14,312 on top of what the Commonwealth charges.
★★ Who is actually liable for it?
Both parties, and this is where custom and law diverge. The Commonwealth's position, from the Department of Revenue: "Both grantor and grantee are held jointly and severally liable for payment of the tax."
Philadelphia states its own position just as clearly. The tax "is usually split evenly between the buyer and the seller, but this is not a legal requirement. The City has the right to collect 100% of the tax from either party, so it's in the best interest of the buyer to make sure the tax is paid in full at the closing of the sale."
We are lenders, and how the tax is allocated between buyer and seller is a contract matter for your agent and your closing agent. What we will do is make sure the figure is in your cash plan from the start, at the full amount rather than the assumed half.
Why doesn't the physician loan just cover it?
Because a mortgage finances the property, and transfer tax is a tax on the transfer. 100% financing means the loan covers the purchase price, so there is no down payment to find. It does not create cash for taxes, recording fees, prepaid items or reserves.
This is the most common misunderstanding we correct on Pennsylvania files. "No money down" and "no money needed" are different statements, and in Philadelphia the gap between them is thousands of dollars.
What about the rest of Pennsylvania?
The Commonwealth charges 1% everywhere. On top of that, the Department of Revenue says county Recorders of Deeds often collect an additional local realty transfer tax, and local jurisdictions may share their portion between school districts and municipalities.
We are not going to publish a local rate we have not verified. The Department does not publish a rate table, and for Pittsburgh and Allegheny County the official sites refuse automated access entirely, so we have no primary source for those figures. Ask your closing agent or the county Recorder of Deeds for your local rate, and assume it is more than nothing.
Philadelphia is the exception on this site precisely because the City publishes its own rate openly, so we can state it.
What goes into the taxable amount?
Sale price or assessed value, plus any assumed debt. The Commonwealth's version reaches the value of real estate transferred by deed, instrument, long-term lease or other writing, and expressly includes contracted-for improvements to property.
That last phrase matters on new construction. If improvements are contracted for as part of the transfer, they can form part of the base. Confirm the computation with your closing agent on any build or substantial-renovation purchase.
The Commonwealth's wording also reaches transfers by long-term lease. That is a defined category rather than an ordinary residential tenancy, and we have not verified the threshold, so we will not state one. If you are converting a property to a rental, raise it with your attorney.
When is it due?
At recording. The City says the tax should be paid when the sale document is presented for recording, and that payment is required within 30 days after receipt by the Department of Records.
In practice it is handled at closing, which is exactly why it has to be funded by then rather than planned for afterwards.
So what should a physician do about it?
Three things, and the first one is just arithmetic. Take your target price, multiply by 4.578% if you are buying in Philadelphia, and treat the result as a real line in your cash plan. Then ask us to build it into the figures rather than discovering it on a closing disclosure. Then confirm the local rate with your closing agent if you are buying anywhere else in the state.
Call Mike at (480) 296-6513 and we will run your actual numbers with the tax in them.
Frequently asked questions
Who pays the realty transfer tax in Philadelphia?
The City states the tax is usually split evenly between buyer and seller, but that this is not a legal requirement and that the City has the right to collect 100% of the tax from either party. At Commonwealth level the Department of Revenue states both grantor and grantee are jointly and severally liable. Allocation between the parties is a contract matter. Verified 2026-10-06.What is the realty transfer tax rate in Pennsylvania?
The Commonwealth charges 1% on the value of real estate transferred by deed, instrument, long-term lease or other writing, including contracted-for improvements. County Recorders of Deeds often collect an additional local realty transfer tax on top. In Philadelphia the combined rate is 4.578%, being 3.578% city plus the 1% Commonwealth. Verified 2026-10-06.Does 100% financing mean I need no cash at closing in Pennsylvania?
No. 100% financing removes the down payment, not the cash costs. Realty transfer tax, recording fees, prepaid items and reserves are still due. In Philadelphia the transfer tax alone is 4.578% of the price, which on a $500,000 purchase is $22,890 in total or about $11,445 at the customary even split.Is the transfer tax calculated on the purchase price or the assessed value?
On the sale price or assessed value, plus any assumed debt. The City of Philadelphia's published formula is actual consideration multiplied by .04578. Where no sales price exists the tax is calculated from a value determined by the Office of Property Assessment. Verified 2026-10-06.What is the transfer tax in Pittsburgh?
We do not publish a Pittsburgh figure because we have no primary source for it. The City of Pittsburgh and Allegheny County websites refuse automated access, and the Pennsylvania Department of Revenue does not publish a table of local rates. What is verified is the 1% Commonwealth rate and the Department's statement that an additional local tax is often collected. Ask the Allegheny County Recorder of Deeds or your closing agent for the local figure.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal, tax, or licensure advice. Physician-loan program terms, eligible degrees, and overlays are set by the lender and change. Pennsylvania Primary Care Loan Repayment Program award amounts, eligibility and application cycles are set by the Pennsylvania Department of Health and change; figures here carry the date we verified them against the Department's published RFA and Fact Sheet. Realty transfer tax rates are set by the Commonwealth and by local jurisdictions and change. All loans are subject to borrower and property qualification, including credit and income review.