Realty Transfer Tax Exemptions: The Complete List for Pennsylvania

Pennsylvania imposes a 1% state realty transfer tax on every transfer of real estate, and most municipalities impose an additional 1% local tax (2% total is typical in Bucks County). But not every transfer is taxable. The Tax Reform Code (72 P.S. § 8102-C.3) contains a long list of exemptions that can save thousands of dollars; if you know they exist and structure the transaction correctly.

For the basic calculation, see our Realty Transfer Tax page and Transfer Tax Calculator . This page covers the exemptions.

Key Exemptions

Family Transfers

Transfers between the following family members are exempt :

• Husband and wife
• Parent and child (including stepchildren and adopted children)
• Grandparent and grandchild
• Brother and sister (including the spouse of a brother or sister), per Act 85 of 2012
• Same lineal family for no or nominal consideration

The sibling exemption was added by Act 85 of 2012 (P.L.751, No.85), effective July 2, 2012, amending 72 P.S. § 8102-C.3(6). Note that if the sibling-grantee transfers the property to a non-exempt party within one year, the subsequent transfer is taxed as if the original grantor made the transfer directly.

Trust Transfers

Transfers to or from a revocable living trust are exempt when the settlor is the beneficiary during the settlor’s lifetime. This includes:

• Individual to their own revocable trust
• Revocable trust back to the settlor
• Revocable trust to the trust beneficiaries upon the settlor’s death (if the transfer would have been exempt if made directly from the settlor)

Transfers to irrevocable trusts may or may not be exempt depending on the trust structure and the relationship between settlor and beneficiaries.

Divorce and Separation

Transfers between spouses or former spouses incident to a divorce or property settlement agreement are exempt. The transfer must be pursuant to a court order or written agreement.

Estate Administration

Transfers from a decedent ’s estate to beneficiaries or devisees are exempt; but only to the extent the transfer is pursuant to the will or intestacy laws. A sale of estate property to a third party is not exempt .

Entity Transfers

Transfers to or from entities owned entirely by the same people require careful analysis. The 89/11 rule applies: if a transfer to a company or from a company is between entities with 89% or more common ownership, the transfer is generally exempt. Changes in entity ownership (90%+ interest transfer) can trigger the tax even without a deed changing hands.

Other Notable Exemptions

• Confirmatory deeds: Deeds that correct an error in a prior deed (no change in ownership)
• Government and nonprofit transfers: Transfers to government agencies and qualifying nonprofits
• Sheriff’s sales and foreclosures: Transfers pursuant to judicial sale or foreclosure are exempt from the buyer’s share in certain circumstances
• Agricultural conservation easements: Qualifying agricultural transfers

Common Traps

• Adding a name to a deed: Adding a child to your deed as a joint tenant is a taxable transfer of a 50% interest (unless the family exemption applies)
• LLC transfers: Transferring property into an LLC you own is generally exempt, but selling your LLC membership interest (rather than the property) can trigger the tax if 90%+ of the interest is transferred
• Assuming the exemption applies: You must claim the exemption on the Statement of Value form filed with the Recorder of Deeds. Failure to claim it can result in assessment of the full tax

Statutory content on this page was last verified against Pennsylvania statutes (68 Pa.C.S.; 21 P.S.): February 2026 . If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.