PA Realty Transfer Tax: Family Transfers

Pennsylvania imposes a realty transfer tax on every transfer of real estate, typically 2% in Bucks County (1% state plus 1% local). Many family transfers are exempt, but not all, and the line is not always where people expect. For the basic calculation, see our Realty Transfer Tax page. For the full statutory list, see Realty Transfer Tax Exemptions: Complete List.

Family Transfers That Are Exempt

The exemptions live in the Tax Reform Code at 72 P.S. § 8102-C.3, supplemented by the Department of Revenue regulations at 61 Pa. Code § 91.193. The family exemption is subsection (6). It covers transfers between the relationships in the table below, in either direction.

The family exemption reaches up and down the lineal line and out to siblings. It also includes the spouse of a child, grandchild, brother, or sister. Stepchildren have been covered since July 2, 2012, and adopted children are treated the same as natural children. A transfer between current spouses is exempt without condition, which includes adding a spouse to the deed or removing one from it.

One relationship that surprises people: divorced former spouses. A transfer between ex-spouses is exempt only where the property was acquired by both spouses, or by either spouse, before or during their marriage (61 Pa. Code § 91.193(b)(6)(i)(F)). Pennsylvania does not require the transfer to be tied to a court order, a written agreement, or the divorce itself.

Transfers Between Siblings

The sibling exemption is the one most people do not know exists, and it is why searches for "realty transfer tax exemption between siblings" turn up so often. A transfer between a brother and a sister, including a sibling's spouse, is exempt under 72 P.S. § 8102-C.3(6). This was not always the law; the exemption was added by Act 85 of 2012 (P.L.751, No.85), effective July 2, 2012.

One condition applies to every transfer claimed under the family exemption, siblings included. A one-year clawback runs under 61 Pa. Code § 91.193(b)(6): if the family member who receives the property transfers it to a non-exempt party within one year, the later transfer is taxed as if the original grantor had made it directly. The exemption is meant for genuine family transfers, not for routing a sale through a relative to dodge the tax.

Transfers To and From a Trust

Transfers to or from a revocable living trust are exempt when the settlor is the beneficiary during the settlor's lifetime. Three situations are covered:

• An individual transferring to their own revocable trust (72 P.S. § 8102-C.3(8.1))
• A revocable trust transferring back to the settlor (72 P.S. § 8102-C.3(9.2))
• A revocable trust transferring property after the settlor's death to a beneficiary to whom the property is devised or bequeathed (72 P.S. § 8102-C.3(9.1))

These are cross-referenced in the regulations at 61 Pa. Code § 91.193(b)(32) through (34). Transfers to an irrevocable trust may or may not be exempt; it depends on the trust structure and the relationship between the settlor and the beneficiaries. Do not assume an irrevocable trust transfer is tax-free.

Transfers To and From a Family Entity

This is where families guess wrong, and the guess is expensive. Pennsylvania treats an LLC, corporation, or partnership as a separate person from its owners. A deed from an individual into an entity is fully taxable even if that individual owns 100% of the entity, and even if no money changes hands (61 Pa. Code § 91.154). Unlike some other states, Pennsylvania has no "mere change of identity" or "same beneficial ownership" exemption for a deed into your own company.

The carve-outs that do exist are narrow and mostly run the other direction. A distribution from an entity to an owner is exempt only if the owner takes a share matching their ownership percentage and has held the interest for more than two years (72 P.S. § 8102-C.3(13)). Real estate devoted to the business of agriculture can pass into a family farm business that the same family directly owns at least 75% of (72 P.S. § 8102-C.3(19)). A transfer between members of the same family of an ownership interest in a real estate company or family farm business is exempt (72 P.S. § 8102-C.3(20)).

Selling the entity instead of the property does not avoid the tax either. If 90% or more of a "real estate company" changes hands within three years, the company is treated as acquired and the tax is due on the real estate it holds, with no deed required (72 P.S. § 8102-C.5; 61 Pa. Code § 91.202).

The CLR Catch on Discounted Family Transfers

Even when a family transfer is taxable, families often sell to each other at a discount. Pennsylvania does not always accept the low price on the deed. For a genuine arm's-length sale, the tax is calculated on the actual sale price (61 Pa. Code § 91.132). For a transfer made without consideration, or for nominal or below-market consideration, the Department of Revenue applies the assessed value multiplied by the county Common Level Ratio (CLR) factor (61 Pa. Code § 91.131, § 91.135). In Bucks County the CLR factor is 17.86 for July 2026 to June 2027.

A below-market sale to a relative can be pushed up to the CLR-derived value, which means more tax than the family expected. If the transfer qualifies for the family exemption, this does not matter because no tax is due. If it does not qualify, the discount can cost real money. The fix is usually one of three things: claim a valid exemption, obtain an appraisal showing the actual market value is lower than the CLR computation, or be prepared to pay tax on the higher amount.

How to Claim the Exemption

An exemption is not automatic. Even for an exempt transfer, you must claim it on the Statement of Value filed with the Recorder of Deeds when the deed is recorded. If you do not file the statement, or you claim the wrong exemption, you can be assessed the full tax plus interest. Getting the deed and the statement right the first time is far cheaper than fixing an assessment later.

Do not pay tax you do not owe. If you are transferring property to a family member, a trust, or a family entity in Bucks County and want to confirm the right exemption before you record, schedule a consultation or call 215-949-0888.

Statutory content on this page was last verified against Pennsylvania statutes (20 Pa.C.S.; 72 P.S. Art. XXI): Jul. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.