For many years a transfer between parents and their children has been exempt from real estate transfer tax, with one exception – a transfer from step parent to a step child. Governor Corbett recently signed new tax legislation into law to fix that loophole. Now a transfer from a step parent and step child are exempt from real estate transfer tax. Real estate transfer tax is required to be paid on every real estate sale unless it is specifically exempt or excluded. The relevant portions of the new law are set forth below.
A transfer between husband and wife, between persons who were previously husband and wife who have since been divorced, provided the property or interest therein subject to such transfer was acquired by the husband and wife or husband or wife prior to the granting of the final decree in divorce, between parent and child or the spouse of such child, between a stepparent and a stepchild or the spouse of the stepchild,between brother or sister or spouse of a brother or sister and brother or sister or the spouse of a brother or sister and between a grandparent and grandchild or the spouse of such grandchild, except that a subsequent transfer by the grantee within one year shall be subject to tax as if the grantor were making such transfer.
Click here to view Act 85 of 2012.
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