The two taxes that shape every Philly purchase
Every home sale in Pennsylvania pays a realty transfer tax at closing. In Bucks, Montgomery, Delaware, and Chester counties the rate is 2%, and custom splits it 1% to the buyer and 1% to the seller. Inside city limits the rate has been 4.578% since July 1, 2025, which is 3.578% for the city plus 1% for the state. Custom splits that evenly too, so the buyer’s share is 2.289% of the price.
| Purchase price | Philadelphia total (4.578%) | Suburbs total (2%) | Your half in Philly | Your half in the suburbs |
|---|---|---|---|---|
| $250,000 | $11,445 | $5,000 | $5,723 | $2,500 |
| $350,000 | $16,023 | $7,000 | $8,012 | $3,500 |
| $450,000 | $20,601 | $9,000 | $10,301 | $4,500 |
A handful of suburban towns charge more than 2%. Radnor, Upper Darby, Tredyffrin, and the City of Chester sit at 2.5%, and Upper Providence and Coatesville sit at 3%. Bucks and Montgomery counties have no deviations that we could find.
Property tax runs the other way. Philadelphia’s rate is 1.3998% of assessed value, and the $100,000 homestead exemption takes up to $1,399 a year off an owner-occupied bill. Suburban rates depend on the school district, and some Bucks and Montco districts land higher than the city. Ask the lender to estimate the escrow for the exact address before you offer.
Pre-approval, Philly style
Listing agents in the city expect a pre-approval letter with the offer, and in Fishtown or East Passyunk they expect it the same afternoon. A real pre-approval means the lender pulled credit, reviewed pay stubs and bank statements, and ran the file through automated underwriting. A pre-qualification is a chat. Agents here have seen enough of both to know which one they’re holding.
The letter should name the loan type, because the house dictates it. A 1920s South Philly rowhome with flaking paint on the porch rail may need repairs before an FHA or VA appraiser signs off. A Center City condo needs a building that passes the lender’s project review. Matching the loan to the house before you write the offer saves everyone a week, and sometimes the deal.
Seller assist is normal here
Philadelphia buyers routinely ask the seller to pay part of the closing costs, and sellers in the city expect the ask. On a $300,000 rowhome, your half of the transfer tax is $6,867 and the owner’s title policy at Pennsylvania’s filed rate is $2,165, so a seller assist of a few percent can cover both. Each loan type caps how much a seller can contribute, and the lender will tell you the cap before you write the offer.
Pennsylvania doesn’t require an attorney at closing. A title company runs the settlement, and because title premiums come from a statewide rate manual, shopping the title agent changes very little. The lender fees are where the differences live.
Which loan fits which house
- Conventional. 3% down for buyers under the area income limit, subject to lender approval, and mortgage insurance you can cancel later. The 2026 conforming limit is $832,750 in all five counties. See conventional loans.
- FHA. 3.5% down with a 580 or better score, forgiving on credit, strict on peeling paint. The 2026 limit for the Philadelphia area is $630,200 for a single unit. See FHA loans.
- VA. Zero down and no loan limit with full entitlement, for veterans, service members, and eligible spouses. See VA loans.
- USDA. Zero down in the outer stretches of Bucks, Montgomery, and Chester counties. Nothing in the city or Delco qualifies. See USDA loans.
- Jumbo. Anything above $832,750, which is most of the Main Line and a good deal of Society Hill. See jumbo loans.
From the first call to the keys
- The call. You tell us the price range, the area, and whether you’ve owned before. We put you with a lender who does that kind of loan in that kind of place.
- Pre-approval. Credit, income, assets, and automated underwriting. Usually a few days, subject to the lender.
- Counseling, if you’re using a grant. Philly First Home requires one-on-one counseling before you sign the Agreement of Sale.
- The offer. Price, seller assist, inspection terms, and a closing date the lender can actually hit.
- Inspection and appraisal. The inspector works for you. The appraiser works for the lender, and on a pre-1978 house will note anything that flakes.
- Underwriting and closing. The title company records the deed, the transfer tax gets paid at recording, and you get keys. Then you learn about the parking chair.
Philly First Home pays up to $10,000, and the counseling has to be finished before you sign the Agreement of Sale. Sign first and the grant is gone. Nobody warns you about that until it’s too late, so we’re warning you now.
Start with one call
One call. Tell us the price range and the area, and we’ll connect you with a lender who does your kind of loan on your kind of house, with the transfer tax already in the estimate. Call us.