2020 will bring higher realty transfer taxes to the City of Pittsburgh.
The combined transfer tax rate is currently 4.50% for property located in the City of Pittsburgh and Pittsburgh School District. Actually, the tax consists of four distinct components (summarized in the accompanying chart): State, Pittsburgh School District, City of Pittsburgh “Realty Transfer Tax, and City of Pittsburgh “Home Rule Realty Transfer Tax”. The overall rate will increase to 5.0%, effective January 1, 2020, due to a scheduled increase in the “Home Rule Realty Transfer Tax” component. At 5.0%, Pittsburgh will have one of the highest realty transfer tax rates in the nation.
An ordinance amending the Pittsburgh Code applicable to the Home Rule Realty Transfer Tax was passed by City Council and signed into law by the Mayor in December 2017. The ordinance increased the rate from 1.0% to 2.0% in two steps – 1.0% to 1.50%, effective February 1, 2018 and 1.50% to 2.0%, effective January 1, 2020. The additional taxes will support the City’s Housing Opportunity Fund.
Realty transfer tax is imposed for the privilege of recording an instrument, such as a deed, that transfers an interest in real property (there are exceptions to the tax). It is customary for the transfer tax to be shared equally between buyer and seller, however, the parties may negotiate a different allocation.