California Documentary Transfer Tax

California Documentary Transfer Tax



FAQ
What is a Documentary Transfer Tax?

Short Answer
It is a tax imposed by the County and/or City for the transfer of property.

Explanation
When the ownership of a property changes hands, the ownership transfer document (Grant Deed, for example) needs to be recorded in the County Recorder’s office where the property is located. The County Recorder, under the Revenue and Taxation Code, collects a “transfer fee” on behalf of the State Board of Equalization. This fee is the Documentary Transfer Tax and is part of the revenue that is generated for the individual counties and cities.

FAQ
Who pays for the Documentary Transfer Tax?

Short Answer
Either the Buyer or the Seller.

Explanation
The payment of the transfer tax can be negotiated between the Buyer and the Seller.

Normally,
in Southern California, the Seller pays.
In Northern California, the Buyer pays.
In Central California, it can be a combination of both.

By the way, the County Recorder does not care who pays, as long as it gets paid if it is due.

FAQ
How much is the Documentary Transfer Tax?

Short Answer
It depends on the location of the property. The County Transfer Tax is a standard of $1.10 per $1,000 of the sales price throughout the State. However, there are certain cities that also collect their own City Transfer Tax and those differ.

We have developed a California Documentary Transfer Tax Calculator calculator to help you calculate the county, the city (if any) and the total documentary transfer tax.

Explanation
The California Revenue and Taxation Code has set this tax for all counties at $1.10 per $1,000 (or $0.55 per $500.00 to be exact per the Code) of the transfer value (sales price) of the property to be transferred.

Example #1:
An Arcadia property is sold for $1,000,000.
The Documentary Transfer Tax payable to the Los Angeles County is $1,100 ($1,000,000/$1,000 x $1.10). No City Documentary Transfer Tax.

Example #2:
A Santa Monica beach property is sold for $2,000,000.
The Documentary Transfer Tax payable to the Los Angeles County is $2,200 ($2,000,000/$1,000 x $1.10), and
the Documentary Transfer Tax payable to the City of Santa Monica is $6,000 ($2,000,000/$1,000 x $3.00).
Total Documentary Transfer Tax is $8,200 ($2,200 + $6,000).

Example #3:
A San Francisco property sold for $5,000,000.
The Documentary Transfer Tax payable to the County of San Francisco is $0 (San Francisco has no county transfer tax), and
the Documentary Transfer Tax payable to the City of San Francisco is $37,500 ($5,000,000/$1,000 x $7.50).
Total Documentary Transfer Tax is $37,500.00 ($0 + $37,500).

California Documentary Transfer Tax Calculator calculator

FAQ
When is the Documentary Transfer Tax paid?

Short Answer
When the County Recorder receives the property transfer document (Grant Deed, for example) for recordation.

Explanation
The Documentary Transfer Tax is paid together with the recording fee at the time the County Recorder receives the property transfer document for recordation.

If this is through an escrow transaction, then the Documentary Transfer Tax is paid with all the other escrow closing costs and will show on the parties’ escrow closing statement.

FAQ
Do I need to pay Documentary Transfer Tax if I transfer my property to my son?
Do I need to pay Documentary Transfer Tax if I transfer my property to my trust?

Short Answer
No. If there was no actual money involved in the transfer.

Explanation
There are certain exemptions to the payment of the Documentary Transfer Tax. Such exemptions include, transfers that are a “gift” and can be proven that no money was involved; transfers between individuals and their Revocable Trusts; transfers between spouses for no value.

If no Documentary Transfer Tax is declared, certain counties require an Affidavit to be completed, signed under penalty of perjury, and attached to the ownership document at the time of recordation.

FAQ
Where can I find the tax code regarding Documentary Transfer Tax?

Answer
California Revenue and Taxation Code Section 11911.
California Revenue and Taxation Code


{ 88 comments… read them below or add one }

Leo April 3, 2014 at 8:23 pm

My brother is aging and wants to add my name to the deed to his house. There will be no money exchanged. Would this be considered a Bona fide gift? Would his house be reassessed and would I have to pay a transfer tax? How would I answer the San Francisco Transfer Tax Affidavit Ques #6 (Taxable transactions): consideration paid; fair market value; & tax due?

Reply

Juliana Tu April 4, 2014 at 7:26 pm

The adding of your name to your brother’s property, without consideration, would be considered a gift. You would type in the following recital in the deed:

“This is a bonafide gift, transfer between siblings, and there is no consideration involved, R&T 11931”

There would be no re-assessment and no transfer tax. You would not answer item #6 of the San Francisco Transfer Tax Affidavit.

Reply

Todd Keil March 27, 2014 at 12:34 pm

I live in Clovis, California which is in Fresno County. My ex-wife and my divorce is now final and within our dissolution agreement, I am retaining the house and am resuming full responsibility of the mortgage. I am attempting to complete the quitclaim deed to remove her name from the original deed completed when we purchased the home and have my name solely on the revised deed . Is there a “documentary transfer tax” required to be recorded in the quitclaim deed or is it $0.00 in our particular case?

Reply

Juliana Tu March 27, 2014 at 2:52 pm

In your case of preparing a deed to remove an ex-spouse, there is no transfer tax. However, in the preparation of the deed, please be sure you put in the following exemption right under the legal description and above the signature line:

“This conveyance is in dissolution of marriage by one spouse to the other, R & T 11927.”

And mark “A” in Part 1 of the Preliminary Change of Ownership form.

Reply

Lalie Crawford March 8, 2014 at 5:08 pm

My father (resident of San Bernardino county) would like to “gift” a timeshare (in San Diego county) to me, his daughter (resident of Riverside county). It is presently in his trust, of which my sister & I are the beneficiaries. He would like to gift & transfer it now. What forms would need to be filled out, does my sister need to sign off on any forms, which county’s forms do we go by, and which county is it filed in? It is a gift & no money involved. Thanks for your help

Reply

Juliana Tu March 9, 2014 at 5:03 pm

I am so sorry, we don’t do time share transfers so we are unable to answer your question as to how to transfer your father’s time share ownership. You will need to go to the company from which he purchased the time share from and let them advise you on what to do.

I regret that we can’t help you further!

Reply

Deb February 28, 2014 at 6:08 pm

My sister suied my brother and I, as co-trustees, my father removed her from his Trust, however to settle the case, we gave her one of the rental properties. in a settlement agreement. What do I put on the Quick claim deed? As a gift, ?? We received no money.

Reply

Juliana Tu March 1, 2014 at 11:39 am

We are a Settlement Services Company in California. My answers below are predicated on the assumption that the property is in the State of California only. Other states have different government regulations that we cannot comment on.

For the transfer tax exemption in your case wherein you are gifting the rental property to your sister to settle a case, I would put down “This is a bonafide gift, transfer pursuant to settlement for interfamily dispute, and there is no consideration involved, R&T 11911.”

This may be a gift but you give some additional information so that County Recorder and Assessor’s office knows a little more of why there is a request for exemption. Please be sure you fill out the Preliminary Change of Ownership form.

Reply

Xiaomei Hsu February 18, 2014 at 1:23 pm

Hello,
We live in LA county. My son couple and I are Joint Tenancy and I have a third of the property. Now I want give my part as a gift to my son couple. What should I do ? Is it use “Quit Claim Dead” ?
Do I have to pay any taxes ? like gift tax and Deed Transfer tax ?

Thanks,

XM

Reply

Juliana Tu February 18, 2014 at 6:59 pm

You can do a Grant Deed from you to your son and his wife, and put the following exemption on the Deed: “This is a bonafide gift, transfer between parent and children, and there is no consideration involved, R&T 11911”. Also complete and check the correct box on the preliminary change of ownership form. This will exempt you from the payment of Transfer Tax and re-assessment of property taxes.

As to actual gift taxes, that is a question that you and your son will need to get your CPA’s opinion. We won’t be able to comment on that.

Reply

Ari February 15, 2014 at 11:22 am

I am in the process of buying a new home home in a development currently under construction in Los Angeles county & city. The lender is stating that I am responsible for the transfer tax and not the seller. Is there an exception to the rule regarding new construction stating that the buyer is responsible for the transfer tax? All documentation I’ve reviewed state that this falls on the seller.

Thanks for your help!

Ari

Reply

Juliana Tu February 15, 2014 at 10:32 pm

Different parts of the state have different customary practices regarding who pays for what closing costs, including the transfer tax. Normally in Southern California, Los Angeles County, the Seller pays. However, this is a cost that can be negotiated between Buyer and Seller, and from time to time, we will find a transaction in which the Buyer pays for the transfer tax instead of the Seller.

That being said, under the federal guidelines established in 2010 the HUD-1 (government format closing statement) calls for the transfer tax to be shown as a Buyer closing cost. As it is normally paid by the Seller in Southern California, we show it on the HUD-1 as a debit to the Buyer and then a credit from the Seller as a reimbursement back to the Buyer. So it washes out on the Buyer’s side. Perhaps your Lender had that in mind when they told you that you are responsible for the transfer tax cost. I would first review the purchase contract signed with your Seller to determine how it is written in there as to who is paying the cost before you respond or question the Lender as to their assumption.

Hope this helps!

Reply

sam January 27, 2014 at 8:13 pm

hi i wanna know if I transfer my property deed to my cuisine as he is the owner do i, or he is gonna pay any tax or like a gift tax or any kind of tax??????

Reply

Juliana Tu January 28, 2014 at 1:38 pm

If you transfer your property to your cousin, there is a possibility that he will pay some sort of gift tax. We are not financial consultants and we don’t know your or your cousin’s financial status. You will need to contact a CPA to find out what kind of tax consequences you and also your cousin will have.

I am sorry we are unable to help you further.

Reply

Victoria January 19, 2014 at 5:01 pm

Hi, my 50% partner on the land we own would like to quit claim on the property located at pearblossom california. We have agreed that I will pay her $5,000.
If I calculate the documentary tax ($1.10/$1,000), I will be paying $5.50. Is this correct? There is also this City Tax (blank in the form) to complete. How do I calculate the City Tax ? Is the City Tax required?

Thanks, any help on the info will be very much appreciated. Hope to hear from you soon.

Reply

Juliana Tu January 20, 2014 at 8:31 pm

The County transfer tax on $5,000 will be $5.50. City transfer tax applies only if that city where your property is located in requires it. If the City is “Pear Blossom”, I don’t think there is any City Transfer Tax, so that would remain blank.

Reply

lily January 6, 2014 at 1:27 am

Hello Juliana,
I have read your Q&A. It is very helpful.
I have tow questions.

1, If there is transfer tax in the sale of property between parents and child? When the parents sell the property to the child and also give or carry the down payment, should the transfer tax based on the sale’s price or sale’s price subtracting the down payment/quite 2nd loan.

2, Couple A bought a property with 970000 and has a $550,000 loan on it. Couple A will transfer 50% value to couple B (non family member). Couple B will pay couple A $210,000 for consideration. What is the value the county tax and city transfer taxes based on and what is the wording and document we should use?

Thank you

Reply

Juliana Tu January 6, 2014 at 3:37 pm

Here are the possible answers to your question:

1. If this is a sale between parents and children and not a “gift”, then transfer tax is due, based on the sales value of property, minus any existing liens if those are to be taken over by the children. Example: property is $500,000. The existing loan on it is $300,000 and the children will take over this loan. You must base the transfer tax on the equity being transferred, which is $500,000 – $300,000 = $200,000. The downpayment that the parents are helping the children carry is not figured into the equation, nor is any new loan carried by the parents.

2. When a percentage of the property is being sold then everything is figured on the percentage. If the property is valued at $970,000 and has a loan for $550,000 on it and Couple B will be purchasing 50% then the transfer tax is figured on the equity being transferred, 50% of the $970,000 and 50% of the $550,000. Therefore $485,000- $275,000 = $210,000. Base the transfer tax on $210,000, which is the equity portion transferred.

There are no transfer tax exemption wording to be typed on the deeds because both of these examples are sale of interest, not a gift. Whether there is city tax or not depends on where the property is located. Be sure you go on our website to see which cities have transfer tax charges.

Reply

Kris December 19, 2013 at 5:42 am

Hello,
I am refinancing and my brother and his wife hold a 50% interest in the property. They will be executing a QCD to leave 100% ownership to me and we have agreed that I pay them $120K for their interest. Would we base the transfer tax on the amount that I am paying for their interest so with the formula of $1.10/$1K transfer tax be $132? Thanks in advance!

Reply

Juliana Tu December 19, 2013 at 10:54 am

You are correct in your calculation of the transfer tax for the relinquishing of ownership by your brother. It is based on the $120,000 as that is the equity that is being transferred. By the way, make sure that the property is not located in one of the cities in California that require their own city transfer tax, because that will apply, too.

Happy Holidays!

Reply

Women With Vision December 4, 2013 at 9:48 pm

Hello,
I believe there is no transfer tax when a nonprofit public benefit charity 501(c)3 sells a property that they own. Is this correct?

Reply

Juliana Tu December 5, 2013 at 9:35 am

I am sorry to advise you that as far as I know there is no exemption with California’s Revenue and Taxation Code that states a nonprofit organization does not have to pay transfer tax upon the sale of a property for consideration.

Your question is perhaps best directed to the County Recorder’s office in the county where the property is located or the State Board of Equalization which actually handles that part of the Revenue and Taxation Code.

Have a happy holiday!

Reply

Pat December 4, 2013 at 5:45 pm

My 3 adult children inherited a house from their father in 2010 when he passed away. Two of the children turned over their share of the house, for an agreed amount of money, to the older child and now he is selling the house. Does he have to pay a transfer tax for this sale? If he does, how is that amount figured.

Reply

Juliana Tu December 4, 2013 at 6:45 pm

Let me first qualify my answer to your question by stating that we are a settlement services/escrow company in California, and most of our transactions are for handling properties in this state. Other states have different laws, rules, regulations and standards of practices that I cannot comment on. If you are from a state other than California, you should ask your question of closing professionals or closing attorneys in your state.

Transfer tax is paid on the sale of the property by the Seller, who is the older child and who owns the property fully. It is figured on the sales price of the property. There is no exemption because he is selling the property for value and consideration.

Hope this answers your question.

Reply

Beverly August 26, 2013 at 3:34 pm

This is a question re documentary transfer tax in San Francisco, wherein a Trust is terminating, and the property is being transferred to the beneficiary. would this be considered a Gift (Inheritance) per R&T 11930? and if so, what info would go on the Transfer Tax Affidavit?

Thanks for your help!

Beverly

Reply

Juliana Tu August 26, 2013 at 7:38 pm

A transfer from the Trust to the Beneficiaries is considered a gift. On San Francisco’s Transfer Tax Affidavit you would check item #4 and fill in their questions and answer #5 on the second page. You would need to do a brief explanation that the Trust is terminating and the transfer is made according to the Trust

Reply

Ronaele August 9, 2013 at 3:03 pm

I am divorced and am in the process of assuming the loan that was in both my ex and my name. The loan is approved, however the estimated closing costs show a transfer tax. I believe I am exempt since the transfer is part of our divorce agreement and there will be no money paid to my ex. What do I need to do to claim that exemption. The home is in Santa Clara County.

Reply

Juliana Tu August 9, 2013 at 4:43 pm

The Deed in which your ex-spouse grants you the property would be exempt as there is not money paid to him/her. Therefore the Deed would should the following exemption clause: “This conveyance is in dissolution of marriage by one spouse to the other, R & T 11927.”

Please advise your Escrow Officer to have the correct verbiage on the Deed inserted on the Deed for your signature and to take out the transfer tax cost. Since you state that you have a list of estimated closing costs, I am assuming that you are going through a Settlement Agent to handle your transaction! He/she should be able to advise you properly.

Reply

Beverly July 10, 2013 at 10:05 am

“This is a bonafide gift, transfer between parent and children, and there is no consideration involved, R&T 11911″

I assume this applies in San Francisco – transfer tax is excluded?

Reply

Beverly July 10, 2013 at 10:04 am

In San Francisco, can you confirm a parent-child exclusion re Prop 13 – that documentary transfer tax is excluded? “This is a bonafide gift, transfer between parent and children, and there is no consideration involved, R&T 11911″ ?

Reply

Juliana Tu July 10, 2013 at 6:13 pm

San Francisco also has the parent-child transfer tax and property tax re-assessment exclusion. But you do need to fill out their transfer tax affidavit. Please visit their link at and if you go all the way to the bottom of the page, you will see “Transfer Tax Affidavit (pdf) on the left bottom.

Reply

Angela June 26, 2013 at 5:37 am

My husband and I are refinancing our house in San Diego and would like to add our son to the Deed/Title. Will we have to pay any kind of taxes and would the house be reappraised and our property taxes increase?

Reply

Juliana Tu June 26, 2013 at 7:00 pm

If you add your son to your title ownership you can claim Parent Child exemption on the Deed, which means you won’t have to pay transfer tax on the transfer deed and you will be exempt from property tax re-assessment. Be sure you talk to your Escrow Officer who is handling your refinance about this deed that you will need to get done through your transaction!

Reply

Anthony Veader April 18, 2013 at 9:56 am

How is the transfer tax handled when: (1) a person owns the property free and clear; (2) transfers the property to a corporation in which that person is the sole shareholder; and (3) no money is exchanged for the property?

Reply

Juliana Tu April 18, 2013 at 10:39 pm

My answers below are predicated on the assumption that the property is in the State of California only. Other states have different government regulations that we cannot comment on.

In the scenario with the 3 components that you have given me the transfer tax can be exempted. The exemption verbiage you should type on the conveyance deed is: “This is a transfer from and an individual to a legal entity in which the grantors and the grantees are comprised of the same parties who continue to hold the same proportionate interest in the property and there is no consideration involved, R & T 11923 (d).”

That being said, please note that the exemption from property tax re-assessment by the County Assessor’s office and the acceptance by the County Recorder of your exemption on the deed are both subject to these governing bodies’ review. If they need more proof from you for your claim, they will contact you. It is not automatic just because the exemption was written in.

Reply

robert April 9, 2013 at 3:51 pm

I am buying a house with a $900,000 deed of trust encumbering the property. I am paying $100,000 and agreeing to make the loan payments on the $900,000 loan. I am not assuming the loan.

Is the transfer tax based on $100,000 I am paying or $1,000,000 which is the value of the property.

Thank you.

Reply

Juliana Tu April 9, 2013 at 9:05 pm

The transfer tax on a purchase transaction is normally based on the sales price. In your case, it is on the $1,000,000.00. If, however, you were assuming the Seller’s existing loan on the property, let’s say the $900,000.00 loan, then the transfer tax would be based on the equity only, or less liens remaining, which would mean that the tax would be calculated on the equity of $100,000.00.

Reply

Rick Betts April 3, 2013 at 9:20 am

I am trying to determine what my parents paid for a lot in 1960. The Grant Deed shows a Documentary Transfer Tax of $15.40. Was the Tax $1.10 per thousand in 1960 ? If so then I could assume they paid $14,000 for the property.

Reply

Juliana Tu April 3, 2013 at 6:48 pm

If the transfer tax that showed on the Deed is $15.40 then the lot was purchased for $14,000. You are correct in your assumption.

Reply

kim nguyen March 21, 2013 at 9:58 am

What will be the tax implication once the transferred are done? How are we going to handle it?, I receive the property as gift. IRS may tax my brother for the gift i receive for the whole amount. How are we going to handle the tax situation that time., Each of us can only receive up to $13,000/yr to avoid income tax. In this case, it’s a large amount. In this case, the IRS will tax the giver for the different amount less market price, not the receiver., So, let say the market price is $450k and my brother transferred the house tittle with the Loan amount which is 350k. The 100K difference will be used to calculate the tax percentage he has to pay to IRS.,
Would it be simpler to pay the transfer tax now to avoid the IRS in the future?, Regards

Reply

Juliana Tu March 21, 2013 at 8:41 pm

Your question should be directed to your CPA or financial consultant. We are an escrow company and we handle the actual process of selling the property but we do not give legal of financial advice.

You may be misinterpreting the transfer tax and the “gift” tax. The transfer tax is a tax that is paid to the County in which the property is located and has nothing to do with the gift tax to the IRS.

Again, please contact your own financial counsel regarding your question!

Reply

kim nguyen March 11, 2013 at 11:05 am

My brother helped me purchase my home, he is the borrower. We are trying to put the property in my name only so there will be no money transactions done for the property. Would this be an exception for the documentary transfer tax? I will refinance and get a new loan under just my name.

Reply

Juliana Tu March 11, 2013 at 3:04 pm

My answer below is predicated on the assumption that the property is in the State of California only. Other states have different government regulations that we cannot comment on.

If the transfer from your brother to you is considered a “gift”, as there is no monetary consideration involved, you can be exempt from transfer tax, and you would provide the following wording on the transfer deed “This is a bonafide gift, transfer between siblings, and there is no consideration involved, R&T 11911”.

However, that being said, whether or not the County Recorder and the County Tax Assessor will accept this exemption would be up to them. All we can do is recommend how to do it, but it is up to the government agencies to make the final decision. If they do not accept, then you will have to petition them. There is never any guarantee that they will accept that it is a “gift” and they may require some sort of proof that you qualify. You can try it and then see what the County Recorder and Tax Assessor say.

Reply

Vannisha Luna February 23, 2013 at 10:15 am

My father in-law wants to add his son and myself onto title with him, it is my understanding that this would be considered a gift and tax exempt is that correct? He wants to word the Deed in a way that if anything happened to him the house would go to my husband and I. Is this possible seeing that the house is not paid off? If so would we be considered Tenants in Common or Joint Tenants? We all live in the home located in California. The Deed is now worded “John Doe a married man as his sole and separate property.”
Thank you in advance for your advice.

Vannisha

Reply

Juliana Tu February 23, 2013 at 10:28 pm

For your father in law to add his son and you to the property would be considered a bonafide gift, transfer between parent and children, and it would be exempt from transfer tax. Be sure to put the exemption clause on the Grant Deed after the legal description – “This is a bonafide gift, transfer between parent and children, and there is no consideration involved, R&T 11911.”

The vesting on the deed should be your father in law and you and your husband, all as Joint Tenants, NOT Tenants in Common. Holding title as Joint Tenants for the 3 of you would allow for automatic transfer of ownership to the other 2 people in case one passes away, without going through probate. So it would be “John Doe, a married man as his sole and separate property, and James Doe and Jane Doe, husband and wife, all as Joint Tenants”.

Reply

Peter February 6, 2013 at 1:50 pm

If property is acquired through a reorganization of two entities, does the calculation of TTax include a deduction from FMV for the amount of the outstanding loan. If it does, does that include all loans, including mezzanine debt?

Reply

Juliana Tu February 6, 2013 at 6:32 pm

Transfer Tax is calculated on the value of the property transferred less the liens remaining on the property IF the transferee is taking over the property with all the current secured debts remaining on it. So transfer tax is calculated on the equity of the property transferred and the correct box on the Grant Deed should be checked to reflect that it is a transfer less liens. I am not sure what a mezzanine debt is but if this amount is also secured on the property and is going to be taken over by the new owner, then it would be deducted.

The best source of answers for your questions would be the County Recorder’s office where the property is located as they are the government agency that will collect this transfer tax.

Reply

Tom January 24, 2013 at 10:16 am

What about transfer to an Irrevocable Trust? Does the Tax still apply and/or does the wording on the Grant Deed need to be changed?

Reply

Juliana Tu January 24, 2013 at 10:05 pm

Hello and thank you for visiting our Viva Escrow website.

You had a question regarding the transfer of ownership to an Irrevocable Trust. The charge of a Transfer Tax and a re-assessment by the County Tax Assessor applies every time there is a transfer of ownership. If you are requesting an exemption then you would type the exemption code on the Deed and mark the appropriate box on the preliminary change of ownership form. It would then be up to the County Recorder and the County Assessor to determine if they accept your exemption, based on what they see is the relationship of the parties who are doing the transferring and whether there is any consideration involved. So if you are transferring it to your own Irrevocable Trust, it should be acceptable to the 2 government agencies.

Reply

Ruth Eastburn January 15, 2013 at 11:20 am

Which counties in California require the Transfer Tax Affidavit?

Reply

Juliana Tu January 15, 2013 at 5:52 pm

Thank you for leaving a question on our Viva Escrow website. The counties that require the Transfer Tax Affidavits are listed on our site, at this link:

Plus, the County of Santa Clara. A reader very kindly pointed that Santa Clara County also has one, but we have not put it up on our website yet.

Reply

Patricia F. Neyman January 3, 2013 at 8:22 pm

Hi do I need to add any wording to a grant deed that transfers a property into my trust in order to show it should be exempt from transfer tax? Do I leave the wording usually inserted to show the tax in and just put zero in the blanks, or remove it?

Reply

Juliana Tu January 4, 2013 at 6:10 pm

For the grant deed that transfers a property into your Trust, be sure you put in the following verbiage right after the legal description: “This conveyance transfers the Grantor’s interest into his/her/their revocable living trust, R&T 11911.” Just put a zero in the blanks on the top where the transfer tax is usually inserted.

Be sure you attach a preliminary change of ownership form and mark item J 1. Certain counties requires an Affidavit, too. Her is a list:

Thank you. Hope I answered your questions.

Reply

Nic G January 3, 2013 at 4:05 pm

My wife purchased a property with a friend as an investment in 2006, then under her maiden name. Obviously it wasn’t much of an investment. In the last two years, the other owner has vacated the property and my wife and I continue to live and pay all of the taxes and mortgage payments. The idea was that my wife and I would refinance together and remove the other party as he has no further interest. It is my understanding that we can remove the other party from the title by his signing a quit claim. There was and will not be a purchase of his half of the property being that the home has decreased in value etc. Transfer taxes are very high in Oakland where we live $16.10 per $1000 “value” including the CA tax…several thousand dollars. Will we be able to claim the “gift” or other exemption since there was no money exchanged? Essentially we are taking on his portion of the risk, (i.e. debt) and it seems ridiculous that we would need to pay a transfer tax on the property that my wife already owns and is valued very close to what is owed. Is the quit claim the proper form or should it be a grant claim? Can we use the “gift” exemption or other? There is the item of my wife still having the title under her maiden name, so it seems this would be the appropriate time to address that in the title. I assume we have the best chance of avoiding a transfer tax if the other owner’s interest is granted to just my wife as opposed to both of us? If we were somehow not able to avoid the transfer tax, I assume we would only be responsible for 50% of the “value” since my wife is already a 50% owner? Is it the tax assessed value of the home that is used for the calculation, or original purchase price. Our best option right now I think is to actually refi via the HARP program under my wife’s name only to remove the other owner from the mortgage, (which I do believe uses the original loan purchase price). Is there any benefit one way or the other to do the refi or title change before the other?

Reply

Juliana Tu January 3, 2013 at 5:41 pm

Thank you for leaving your question on our website.

Since there is no consideration involved in the transfer of the ownership from your friend and he has vacated the premises, using either a quitclaim deed or a grant deed is fine.

Do the deed from your friend and your wife (married name), who acquired title as wife (original name) as Grantee to under you and your wife, Husband and wife as joint tenants. Here is an example:

“John Doe, a Single Man and Ann Smith, a Married Woman, who acquired title as Ann Jones, a Single Woman, hereby grants to Robert Smith and Ann Smith, husband and wife as Joint Tenants”

The exemption clause that would apply best would be a combination “This is a bonafide gift and conveyance to confirm community property interest and the Grantors received nothing in return, R&T11911”.

Please note that the exemption from property tax re-assessment by the County Assessor’s office and the acceptance by the County Recorder of your exemption on the deed are both subject to these governing bodies’ review. If they need more proof from you for your claim, they will contact you. It is not automatic just because the exemption was written in.

If they do make you pay transfer tax, you should calculate based on 50% of the interest and probably on the original value of the property less the liens remaining on it. So you would be paying on the equity part of the 50% to be transferred. This will probably save you quite a bit of money.

Finally, you asked whether you should do the removal of the other owner when you do the refinance. I think that is a good idea because then you will be able to get your escrow officer to prepare the deed documents correctly and get clearance and title insurance through the title company. Also, there is less of a chance that transfer tax will be required. There is no reason you can’t do the refinance with both you and your wife’s name on it, subject to the proper deed being executed as stated above.

As always, please be sure you obtain your own independent legal and financial counsel before you do anything, and of course, talk to your loan officer once you decide to refinance. Our responses to your questions here are just a guideline as to what could be done but we are not allowed to give legal or financial counsel.

Reply

JJ December 26, 2012 at 12:46 pm

My brother and I bought a house together. We each put $5,000 down and I agreed to make all the payments on the mortgage, our agreement stipulated that I let him earn the tax write off in exchange for his $5000 down payment, then when the loan was paid off he would transfer title to me. I made all payments and the house is now paid off. The value of the house has doubled since we bought it. What is the best way to transfer title, preferably without a tax reassessment. we live in southern California, can we do a quit claim deed? Any advise is greatly appreciated!

Reply

Juliana Tu December 26, 2012 at 5:14 pm

Regardless of whether the house valued doubled (or it might have decreased) since your original agreement and purchase, now that it has been paid, you would ask your brother to sign a Quitclaim deed to you as to his percentage interest. You could use this following transfer tax exemption as there is no consideration involved:
“This is a bonafide gift, transfer between siblings, and the Grantor received nothing in return, R&T 11911.”

That being said, I do caution you that whether or not the County Recorder and the County Tax Assessor will accept this exemption would be up to them. All we can do is recommend, but it is up to the government agencies to make the final decision. If they do not accept your exemption, then you may need to petition them. There is never any guarantee that they will accept that it is a “gift” and they may require some sort of proof that you qualify. You can try it and then see what the County Recorder and Tax Assessor say.

If they insist that you pay transfer tax and show the property value, then I would recommend that you use 50% of the original purchase value and calculate the transfer tax on that value. You would show that value on the 2nd page of the Preliminary Change of Ownership form and notate that it is just a transfer of 50% of the value (you originally owned 50% anyway).

If you need help with the preparation of the necessary documents, I can recommend either The Document Center – #(818)541-0901 or RecordMyDocs.com at #(714)482-2077. Explain what you need and they can help you, I am sure.

Reply

Ken Williams December 17, 2012 at 10:39 pm

I am trying to transfer property from an LLC to a non-profit with no consideration and the Santa Clara county assessor is requiring a transfer tax. I have argued that it is a gift and thus no tax is due but the county doesn’t agree. What can I do?

Reply

Juliana Tu December 18, 2012 at 2:07 pm

Thank you for leaving a question on our website.
Normally the County Recorder and Tax Assessors are leery of transfer tax exemptions between entities because they feel that such transfers do involve monies transferring hands. You mentioned it is a gift. Even a gift has some sort of value to it and it is probably written off in the LLC books with a certain value. Perhaps you can use that value or something approaching that and pay the transfer tax, plus submit that value in the Change of Ownership form.
Please note that even though you request the exemption it does not mean the government agencies will allow it. If they don’t, they will re-assess the property based on a value which they will assign. Therefore, if that scenario comes into play, it would be best to give them a value that they may find acceptable but that is lower than what they may arbitrarily assign to it.
This may not be the answer you were hoping for, but it is given based on our knowledge of how the tax assessors work.

Reply

alec December 2, 2012 at 9:03 pm

If the buyer pays Documentary Transfer Tax in an amount that exceeds the actual purchase price, what would be the consequence when an uninformed party looks at the record and computes the amount paid for the tax?

Reply

Juliana Tu December 3, 2012 at 3:25 pm

If the Transfer Tax reflected on the Deed exceeds the purchase price, 2 things may happen. First of all, the County Assessor’s office may assess on the higher price, and secondly, any person who pulls up a copy of the deed and does the calculations will believe that the owner paid that higher price.
I hope this answers your question. Have a good day!

Reply

John October 12, 2012 at 4:33 pm

Hi, myy wife, my mother in-law and I are all tenants in-common on a property in San Francisco. My wife and I are refinancing the property and removing mom from the title. She is gifting us her interest in the property. We’ve just signed a grant deed and my wife and I will now be Joint Tenants and mom will be off title. The grant deed declared $0 transfer tax but there was no language in the deed itself about a bonafide gift. However, we completed a transfer tax affidavit and indicated it as a gift and my Mother-in-law has signed that form as the grantor. Our title company has assured us that we don’t need to put gift language in the deed and that the affidavit and preliminary change of ownership report will suffice for the transfer tax exemption. Is this good advice? Is there a requirement for the exclusion to be listed on the deed itself? Thanks for your insight!

Reply

Dong Nguyen October 9, 2012 at 4:44 pm

My Dad and I are both on the Joint Tenants Deed. I wanted to be out of the Title and would like to add my Mom to the Deed as Community Property with right of survivor. No money transactions done for the property at all. Would this be an exception for the documentary transfer tax?

Reply

Juliana Tu October 9, 2012 at 6:39 pm

Thank you for leaving a question on Viva Escrow’s website.
Removing or deeding your interest back to your father and mother would qualify for an exemption on the transfer tax. What we normally put on the verbiage on the deed would be as follows:
“This is a bonafide gift, transfer from child to parents, and the Grantor received nothing in return, R&T, 11911.”
The Deed would be from your father and you as Joint Tenants to your father and your mother, husband and wife as community property with rights of survivorship.

Reply

allen September 15, 2012 at 3:04 pm

Is The documentary transfer tax a one time fee on one transaction?

Reply

Juliana Tu September 16, 2012 at 5:21 pm

Thank you for your question on Viva Escrow’s website.
The Documentary Transfer Tax is a one time tax imposed by the counties of California and certain cities also. It is imposed upon the transfer of ownership of a real property and assessed when the transfer deed is recorded.

Reply

Kelly Pirtle August 29, 2012 at 4:50 pm

Do you have to pay a documentary trasfer tax if you give a bonafide gift of only 1/2 of your property as joint tenants? Or would it be better for my friend to buy 1/2 for a dollar?

Reply

Juliana Tu August 29, 2012 at 7:36 pm

Thank you for leaving a question on our website.
Transfer Tax has to be paid on any transfer of real property, unless you can qualify for their exemptions. If you are transferring only half of the interest and it is a transfer without consideration involved, you can use this bonafide gift exemption and it will be up to the County Recorder’s office and the County Tax Collector’s office to determine if they will allow it. Putting $1.00 as the purchase price really won’t make a difference. There is never any guarantee that they will accept that it is a “gift” and they may require some sort of proof that you qualify. You can try it and then see what the County Recorder and Tax Assessor say.
I hope I answered your question. My best advice is that if you have any questions, you should bring them up directly with the government agencies. Our answers here are given from 30 years experience in the escrow field, but ultimately, we are not the government agencies!

Reply

Penny Gonzales July 25, 2012 at 4:54 pm

How would the documentary tax be calculated on a property that is “purchased” for $1. My ex-father-in-law wants to gift a property to me but I was told it would be best if I purchased it for $1. Do you agree? The property is a 99 year lease with 67 years remaining on 3 acres of property. We built the house many years ago which is currently in very poor condition. I believe the current assessed value is around $150,000-$200,000.

Reply

Juliana Tu July 26, 2012 at 9:06 am

Thank you for leaving a question on Viva Escrow’s website.
We are not able to give you any financial or legal counsel. You would be best to contact such professionals to get a good answer to your question, in light that it has to do with you and your ex father-in-law’s financial status. Anything that is done would affect the both of you so I caution you to get the correct legal and financial advice first.
As to the documentary transfer tax clause to be used if the property is purchase for $1.00, you can use the following statement, which is not often used:
“The value of the property in this conveyance, exclusive of liens and encumbrances is $100 or less, and there is no additional consideration received by the Grantor, R&T 11911.”
Please note that the County Assessor’s office has the right to come back to you and question you regarding such a transfer and they will probably need substantive proof of how you established the “price”. You would do well to also call your local County Assessor’s office first to discuss the transfer before you do anything.

Reply

john July 19, 2012 at 6:10 pm

If a property is transferred out of a Living Trust with the beneficiaries being the grantors, and the Grant Deed transfers ownership to an LLC in exchange for a 47% interest in the LLC (with other persons holding the remaining 53% member interests) – I presume this does not qualify for the R&T Section 11930 exemption from Documentary Transfer tax. Right? Even though it is coming as a conveyance out of a Living Trust.

Reply

Juliana Tu July 20, 2012 at 1:03 pm

Thank you for your question on Viva Escrow’s website.
When the Deed is transferring the property in or out of the Trust between the Trust itself and the Trustees/ Settlors/Trustors of the Trust, then the exemption of transfer tax can apply. Unfortunately, a transfer to an LLC even though the Trustees are members of the LLC, would probably not qualify, especially if the LLC is comprised of other parties. You will need to pay transfer tax based on the value of the equity of property transferred (minus liens remaining) and the taxes on the property would probably be re-assessed.

Reply

carolyn June 26, 2012 at 11:46 am

Hi – if a property is titled in the revocable living trust of one spouse, and it is going to be transferred with 2/3 staying in that spouse’s living trust and 1/3 going to the other spouse’s revocable living trust, (1) is documentary transfer tax owing and, if so, on what portion; and (2) how should the language on the deed read? Hoping that no documentary transfer tax is owing and that it is excluded from reassessment by virtue of the fact that it is a nontransfer as to the 2/3 portion staying with original spouse as well as the 1/3 going to receiving spouse.

Thank you so much!

Reply

Juliana Tu June 26, 2012 at 5:58 pm

Thank you for leaving your question on our website. And what an interesting question this is!

This is what I would suggest: I would try to claim Transfer Tax Exemption on both the 2/3rd and the 1/3rd and what I would use for this exemption is this clause to be typed on the Deed:
“This conveyance transfers the interest into revocable living trusts in which the Grantors and the Grantees are comprised of the same parties who continue to hold the same proportionate interests in the property, R&T 11923(d)”

This is not a straight transfer from individual to Trust, or vice versa, so it is a little different. I would put the above verbiage on the Deed and ask for exemption on the whole transfer based on that and see what the County would say. I don’t know if they will exempt it or not but it would be worth a try! At least they should exempt the 2/3rds. But the County Recorder/Assessor may look at it differently from you and I!

Reply

Debbie June 26, 2012 at 9:35 am

I was hoping there is a chart of CA counties, cities that require a Documentary Transfer Tax Affidavit that should accompany the deed and PCOR when recording. Thanks

Reply

Juliana Tu June 26, 2012 at 5:43 pm

Thank you for leaving a comment on our website regarding the Transfer Tax Affidavit.
What we have on our website – http://www.vivaescrow.com/for-your-convenience/faq/transfer-tax-affidavits provides a table of which County/City requires the Transfer Tax Affidavit. You can also access the individual forms by clicking the name on the first column.
We have a number of topics on our website which might be of interest to you if you go to http://www.vivaescrow.com and go to “Resources” and then “Frequently Asked Questions”.

Reply

Danielle Hines May 29, 2012 at 8:32 am

My mom helped me purchase my home, she is the main borrower and I am the co-borrower. We are trying to put the property in my name only so there will be no money transactions done for the property. Would this be an exception for the documentary transfer tax?

Reply

Juliana Tu May 29, 2012 at 9:20 am

Thank you for your question on our website.
A transfer from your mother to you would be a parent to child exclusion for transfer tax so you would not have to pay. You will need to put the exemption wording on the deed – “This is a bonafide gift, transfer between parent and child” and the grantor received nothing in return. R&T 11911”
I recommend that both of you check with your CPAs first to make sure this won’t trigger any gift issues. Also be reminded that she will remain as primary borrower on the existing loan. That won’t change unless you refinance it and get a new loan under just your name.
Thank you and let us know if you have any further questions.

Reply

wilfred May 22, 2012 at 9:51 pm

Hello, my case it’s kind of complicated. For unknown reason my brother and his wife decided to buy a house under my name, I did not know until recently, the thing now is that they have send me a GRANT DEED document, asking me to sign it. I am worry about all the transfer tax, even worse the property tax that needed to be paid throughout past 10 years since they decided to make the purchase. Now obviously I am worry for the legal implications. Do you see any implication other than property o tax issue? I do appreciate your comments.

Reply

Juliana Tu May 23, 2012 at 10:23 am

Thank you for posting a question on our website.
Signing the Grant Deed will effectively release you of ownership of the property. Is your brother requesting that you sign the Deed in which the property is reverted to his name? Did he own the property with you these last 10 years? These are questions for which the answers may affect how I respond. However, here are the answers to your immediate questions:

There may be transfer tax for the Deed that needs to be paid, and there may be an increase in the property taxes, but all that should be your brother’s responsibility as he is requesting you to sign the Deed. You should confirm that with him. Your concern is how it affects your income taxes. If you did not declare the property in your income taxes all these years perhaps there would be no income tax issues with the IRS or the State, but no matter what you should contact your CPA before you sign the Deed, just to protect yourself.

Let us know if we can of further assistance.

Reply

Ron Evanko Sr March 27, 2012 at 3:03 pm

Is it the same rate ($1.10/$1000) for vacant land???

Reply

Juliana Tu March 27, 2012 at 3:54 pm

Mr. Evanko, thank you for your question. Yes, the transfer tax for a vacant land is the same at $1.10 per $1,000.

Reply

harvey elam March 5, 2012 at 4:31 pm

Is Documenatry Transfer Tax charged even when a State Agency like CalTrans acquires property through a “sale” that is compelled by notice the State would initiate condemnation proceedings? If so, and the “Seller’ intends to purchase other property with the proceeds (1031 exchange), but has not yet identified the other property to be purchased, is the Documenatry Transfer Tax calculation based on the amount paid by the State and paid through escrow?

Reply

Juliana Tu March 6, 2012 at 9:52 am

Hello, Harvey,
Thank you for posting a question on our website regarding transfer taxes.

The answer to your questions would be as follows: If you have a standard escrow transaction in which CalTrans or the governement agency is purchasing the property from you, then the Transfer Tax to be paid would be based on the amount that was agreed upon as the sales price. This value would also be the basis amount for you to determine your 1031 exchange. So if they are buying your property for $250,000.00 then that’s what the Documentary Transfer Tax would be based on. Who pays for it would depend on the contract.

However, if there is no sale transaction at all and the State initiated their eminent domain rights, then that is different. There would be no escrow transaction and the State would get the property by Order of Condemnation. In such a case no Transfer Tax is paid at all.

I hope this answers your question. If you have anything else, please feel free to give us a call directly (626)744-1684.

Reply

Sarah March 4, 2012 at 6:09 pm

How is the transfer tax determined when the consideration is not cash, but another piece of real property? Thank you!

Reply

Juliana Tu March 5, 2012 at 10:47 am

Sarah, thank you for posting a question! The answer to your question is that the amount of Transfer Tax would be calculated based on the value of the property for which you are exchanging. Both parties should come up with an agreement as to this value amount. So, let’s say you, Party A, own Property A and are selling it to Party B for Property B. If the value for property B is $500,000, then the transfer tax on Property A would be based on that amount.

Reply

tom Byrne February 14, 2012 at 11:36 am

Are there exemptions for the documentary transfer tax in inheritances (property given to children through a trust) I can see references to “exemptions” but can’t seem to find any noted. I would be most grateful if you could direct me to a trusted answer . . . or is this another of the situations where it may vary from county to county? Help . . . if you can. . . many thanks

Reply

Juliana Tu February 14, 2012 at 5:51 pm

Hello Tom,
Thank you for posting your question.

When the parents, through their Trust, gives property to their children, the language on the Deed would be:
“This is a bonafide gift, transfer from parents to children, and the grantor received nothing in return, R&T 11911”

Under Proposition 58 the County Assessor’s office where the property is located will require the completion of their form called “Claim for Reassessment Exclusion for Transfer between Parent and Child” which is their form OWN-99.
For Los Angeles County you can find it on their website see link: http://assessor.lacounty.gov/extranet/guides/prop58.aspx.

Regards,
Juliana Tu, Escrow Manager

Reply

We welcome your thoughts and insights - post your comments here.