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 
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
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
{ 8 comments… read them below or add one }
Is it the same rate ($1.10/$1000) for vacant land???
Mr. Evanko, thank you for your question. Yes, the transfer tax for a vacant land is the same at $1.10 per $1,000.
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?
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.
How is the transfer tax determined when the consideration is not cash, but another piece of real property? Thank you!
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.
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
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