[Adopted 7-7-1987 by Ord. No. 237 (Part
3, Ch. 2, Art. D, of the 1987 Code)]
This article shall be known as the "Trappe Borough
Real Estate Transfer Tax Ordinance."
A realty transfer tax for general revenue purposes
is hereby imposed upon the transfer of real estate or interest in
real estate situate within the Trappe Borough, regardless of where
the documents making the transfer are made, executed or delivered,
or where the actual settlements on such transfer took place, as authorized
by Article XI-D, Local Real Estate Transfer Tax, 72 P.S. § 8101-D
et seq.
The following words or phrases, when used in
this article, shall have the meanings ascribed to them in this section,
except where the context clearly indicates a different meaning:
A partnership, limited partnership, or any other form of
unincorporated enterprise owned and conducted by two or more persons,
other than a private trust or decedent's estate.
Trappe Borough, Montgomery County, Pennsylvania.
A corporation, joint-stock association, business trust or
bank institution which is organized under the laws of this commonwealth,
the United States, or any other state, territory or foreign country
or dependency.
Any deed, instrument or writing which conveys, transfers, demises, vests, confirms or evidences any transfer or demise of title to real estate, but does not include wills, mortgages, deeds of trust or other instruments of like character given as security for a debt and deeds of release thereof to the debtor, land contracts whereby the legal title does not pass to the grantee until the total consideration specified in the contract has been paid or any cancellation thereof unless the consideration is payable over a period of time exceeding 30 years, or instruments which solely grant, vest or confirm a public utility easement. "Document" shall also include a declaration of acquisition required to be presented for recording under § 300-34.
A corporation of which at least 75% of its assets are devoted
to the business of agriculture and at least 75% of each class of stock
of the corporation is continuously owned by members of the same family.
The business of agriculture shall not be deemed to include:
Recreational activities, such as, but not limited
to, hunting, fishing, camping, skiing, show competition or racing;
The raising, breeding or training of game animals
or game birds, fish, cats, dogs or pets or animals intended for use
in sporting or recreational activities;
Fur farming;
Stockyard and slaughterhouse operations; or
Manufacturing or processing operations of any
kind.
Any individual, such individual's brothers and sisters, the
brothers and sisters of such individual's parents and grandparents,
the ancestors and lineal descendants of any of the foregoing, and
a spouse of any of the foregoing. Individuals related by the half-blood
or legal adoption shall be treated as if they were related by the
whole-blood.
Every natural person, association or corporation. Whenever
used in any clause prescribing and imposing a fine or imprisonment,
or both, the term "person" as applied to associations shall include
the responsible members or general partners thereof and, as applied
to corporations, the officers thereof.
Any lands, tenements or hereditaments within
this Borough, including without limitation buildings, structures,
fixtures, mines, minerals, oil, gas, quarries, spaces with or without
upper or lower boundaries, trees and other improvements, immovables
or interests which by custom, usage or law pass with a conveyance
or land, but excluding permanently attached machinery and equipment
in an industrial plant.
A condominium unit.
A tenant-stockholder's interest in a cooperative
housing corporation, trust or association under a proprietary lease
or occupancy agreement.
A corporation or association which is primarily engaged in
the business of holding, selling or leasing real estate, 90% or more
of the ownership interest in which is held by 35 or fewer persons,
and which:
Derives 60% or more of its annual gross receipts
from the ownership or disposition of real estate; or
Holds real estate, the value of which comprises
90% or more of the value of its entire tangible asset holdings exclusive
of tangible assets which are freely transferable and actively traded
on an established market.
Any interest in real estate which endures for
a period of time, the termination of which is not fixed or ascertained
by a specific number of years, including, without limitation, an estate
in fee simple, life estate, or perpetual leasehold; or
Any interest in real estate enduring for a fixed
period of years but which, either by reason of the length of the term
or the grant of a right to extend the term by renewal or otherwise,
consists of a group of rights approximately those of an estate in
fee simple, life estate or perpetual leasehold, including, without
limitation, a leasehold interest or possessory interest under a lease
or occupancy agreement for a term of 30 years or more or a leasehold
interest or possessory interest in real estate in which the lessee
has equity.
The making, executing, delivering, accepting or presenting
for recording of a document.
In the case of any bona fide sale of real estate
at arm's length for actual monetary worth, the amount of the actual
consideration therefor paid or to be paid, including liens or other
encumbrances thereon existing before the transfer and not removed
thereby, whether or not the underlying indebtedness is assumed, and
ground rents or a commensurate part thereof where such liens or other
encumbrances and ground rents also encumber or are charged against
other real estate, provided that, where such documents shall set forth
a nominal consideration, the "value" thereof shall be determined from
the price set forth in or actual consideration for the contract of
sale;
In the case of a gift, sale by execution upon
a judgment or upon the foreclosure of a mortgage by a judicial officer,
transactions without consideration or for consideration less than
the actual monetary worth of the real estate, a taxable lease, an
occupancy agreement, a leasehold or possessory interest, any exchange
of properties or the real estate of an acquired company, the actual
monetary worth of the real estate determined by adjusting the assessed
value of the real estate for local real estate tax purposes for the
common level ratio factor developed by the Pennsylvania Department
of Revenue for Pennsylvania realty transfer tax base calculations;
The actual consideration for or actual monetary
worth of any executory agreement for the construction of buildings,
structures or other permanent improvements to real estate between
the grantor and other persons existing before the transfer and not
removed thereby or between the grantor, the agent or principal of
the grantor or a related corporation, association or partnership and
the grantee existing before or effective with the transfer.
A.
Every person who makes, executes, delivers, accepts
or presents for recording any document or in whose behalf any document
is made, executed, delivered, accepted or presented for recording
shall be subject to pay for and in respect to the transaction or any
part thereof a tax at the rate of 1% of the value of the real estate
represented by such document, which tax shall be payable at the earlier
of the time the document is presented for recording or within 30 days
of acceptance of such document or within 30 days of becoming an acquired
company.
B.
The payment of the tax imposed herein shall be evidenced
by the affixing of an official stamp or writing by the Recorder, whereon
the date of the payment of the tax, amount of the tax and the signature
of the collecting agent shall be set forth.
C.
For so long as the Perkiomen Valley School District shall continue to levy and impose a real estate transfer tax on the same person or transfer, then the tax levied hereunder shall be limited to 1/2 of the rate fixed under Subsection A of the section as to the person or transfer subject to a real estate transfer tax by both municipal bodies.
D.
If for any reason the tax is not paid when due, interest
at the rate of 10% per annum shall be added and collected.
[Amended 5-1-2007 by Ord. No. 396]
The United States, the commonwealth, or any
of their instrumentalities, agencies or political subdivisions shall
be exempt from payment of the tax imposed by this article. The exemption
of such governmental bodies shall not, however, relieve any other
party to a transaction from liability for the tax.
A.
The tax imposed by § 300-30 shall not be imposed upon:
(1)
A transfer to the commonwealth or to any of its instrumentalities,
agencies or political subdivisions by gift, dedication or deed in
lieu of condemnation or deed of confirmation in connection with condemnation
proceedings or a reconveyance by the condemning body of the property
condemned to the owner of record at the time of condemnation, which
reconveyance may include property line adjustments, provided said
reconveyance is made within one year from the date of condemnation.
(2)
A document which the Borough is prohibited from taxing
under the Constitution or statutes of the United States.
(3)
A conveyance to a municipality, township, school district
or county pursuant to acquisition by the municipality, Borough, school
district or county of a tax delinquent property at sheriff's sale
or tax claim bureau sale.
(4)
A transfer for no consideration or for nominal actual
consideration which corrects or confirms a transfer previously recorded
but which does not extend or limit existing record legal title or
interest.
(5)
A transfer of division in kind for no consideration
or for nominal actual consideration of property passed by testate
or intestate succession and held by cotenants; however, if any of
the parties take shares greater in value than their undivided interest,
tax is due on the excess.
(6)
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 and wife prior to
the granting of the final decree of divorce; between parent and child
or the spouse of such child; between brother or sister or 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.
(7)
A transfer for no consideration or for nominal actual
consideration of property passing by testate or intestate succession
from a personal representative of a descendent to the descendent's
devisee or heir.
(8)
A transfer for no consideration or nominal actual
consideration to a trustee of an ordinary trust, where the transfer
of the same property would be exempt if the transfer was made directly
from the grantor to all of the possible beneficiaries, whether or
not such beneficiaries are contingent or specifically named. No such
exemption shall be granted unless the Recorder of Deeds is presented
with a copy of the trust instrument that clearly identifies the grantor
and all possible beneficiaries.
(9)
A transfer for no consideration or for nominal actual
consideration from a trustee to a beneficiary of an ordinary trust.
(10)
A transfer for no consideration or for nominal
actual consideration from trustee to successor trustee.
(11)
A transfer for no consideration or for nominal
actual consideration between principal and agent or straw party or
from or to an agent or straw party where, if the agent or straw party
were his principal, no tax would be imposed under this article. Where
the document by which title is acquired by a grantee or statement
of value fails to set forth that the property was acquired by the
grantee from or for the benefit of his principal, there is rebuttable
presumption that the property is the property of the grantee in his
individual capacity if the grantee claims an exemption from taxation
under this clause.
(12)
A transfer made pursuant to the statutory merger
or consolidation of a corporation or statutory division of a nonprofit
corporation, except where the Department reasonably determines that
the primary intent for such merger, consolidation or division is avoidance
of the tax imposed by this article.
(13)
A transfer from a corporation or association
of real estate hold of record in the name of the corporation or association,
where the grantee owns stock of the corporation or an interest in
the association in the same proportion as his interest in or ownership
of the real estate being conveyed and where the stock of the corporation
or the interest in the association has been held by the grantee for
more than two years.
(14)
A transfer from a nonprofit industrial development
agency or authority to a grantee of property conveyed by the grantee
to that agency or authority as security for a debt of the grantee
or a transfer to a nonprofit industrial development agency or authority.
(15)
A transfer from a nonprofit industrial development
agency or authority to a grantee purchasing directly from it, but
only if the grantee shall directly use such real estate for the primary
purpose of manufacturing, fabricating, compounding, processing, publishing,
research and development, transportation, energy conversion, energy
production, pollution control, warehousing or agriculture, and the
agency or authority has the full ownership interest in the real estate
transferred.
(16)
A transfer by a mortgagor to the holder of a
bona fide mortgage in default in lieu of a foreclosure or a transfer
pursuant to a judicial sale, in which the successful bidder is the
bona fide holder of a mortgage, unless the holder assigns the bid
to another person.
(17)
Any transfer between religious organizations
or other bodies or persons holding title for a religious organization
if such real estate is not being or has not been used by such transfer
or for commercial purposes.
(18)
A transfer to a conservancy which possesses
a tax exempt status pursuant to Section 501(c)(3) of the Internal
Revenue Code of 1954 [68A Stat. 3, 26 U.S.C. § 501(c)(3)]
and which has, as its primary purpose, the preservation of land for
historic, recreational, scenic, agricultural or open space opportunities.
(19)
A transfer of real estate devoted to the business
of agriculture to a family farm corporation by a member of the same
family which directly owns at least 75% of each class of the stock
thereof.
(20)
A transfer between members of the same family
of an ownership interest in a real estate company or family farm corporation.
(21)
A transaction wherein the tax due is $1 or less.
(22)
Leases for the production or extraction of coal,
oil, natural gas or minerals and assignments therefor.
B.
In order to exercise any exclusion provided in this
section, the true, full and complete value of the transfer shall be
shown on the statement of value. A copy of the Pennsylvania Realty
Transfer Tax Statement of Value may be submitted for this purpose.
For leases of coal, oil, natural gas or minerals, the statement of
value may be limited to an explanation of the reason such document
is not subject to tax under this article.
Except as otherwise provided in § 300-31, documents which make, confirm or evidence any transfer or demise of title to real estate between associations or corporations and the members, partners, shareholders or stockholders thereof are fully taxable. For the purposes of this article, corporations and associations are entities separate from their members, partners, stockholders or shareholders.
A.
A real estate company is an acquired company upon
a change in the ownership interest in the company, however effected,
if the change does not affect the continuity of the company and, of
itself or together with prior changes, has the effect of transferring,
directly or indirectly, 90% or more of the total ownership interest
in the company within a period of three years.
B.
With respect to real estate acquired after February
16, 1986, a family farm corporation is an acquired company when, because
of voluntary or involuntary dissolution, it ceases to be a family
farm corporation or when, because of issuance or transfer of stock
or because of acquisition or transfer of assets that are devoted to
the business of agriculture, it fails to meet the minimum requirements
of a family farm corporation under this article.
C.
Within 30 days after becoming an acquired company,
the company shall present a declaration of acquisition to the recorder
of each county in which it holds real estate for the affixation of
documentary stamps and recording. Such a declaration shall set forth
the value of real estate holdings of the acquired company in such
county. A copy of the Pennsylvania Realty Transfer Tax Declaration
of Acquisition may be submitted for this purpose.
A.
Where there is a transfer of a residential property
by a licensed real estate broker, which property was transferred to
him within the preceding year as consideration for the purchase of
other residential property, a credit for the amount of the tax paid
at the time of the transfer to him shall be given to him toward the
amount of the tax due upon the transfer.
B.
Where there is a transfer by a builder of residential
property, which was transferred to the builder within the preceding
year as consideration for the purchase of new, previously unoccupied
residential property, a credit for the amount of the tax paid at the
time of the transfer to the builder shall be given to the builder
toward the amount of the tax due upon the transfer.
C.
Where there is a transfer of real estate which is
leased by the grantor, a credit for the amount of tax paid at the
time of the lease shall be given the grantor toward the tax due upon
the transfer.
D.
Where there is a conveyance of deed of real estate
which was previously sold under a land contract by the grantor, a
credit for the amount of tax paid at the time of the sale shall be
given the grantor toward the tax due upon the deed.
E.
If the tax due upon the transfer is greater than the
credit given under this section, the difference shall be paid. If
the credit allowed is greater than the amount or tax due, no refund
or carryover credit shall be allowed.
In determining the term of a lease, it shall
be presumed that a right or option to renew or extend a lease will
be exercised if the rental charge to the lessee is fixed or if a method
for calculating the rental charge is established.
The tax imposed in this article shall be fully
paid and have priority out of the proceeds of any judicial sale of
real estate before any other obligation, claim, lien, judgment, estate
or costs of the sale and of the writ upon which the sale is made,
except the state realty transfer tax, and the Sheriff or other officer
conducting said sale shall pay the tax herein imposed out of the first
moneys paid to him in connection therewith. If the proceeds of the
sale are insufficient to pay the entire tax herein imposed, the purchaser
shall be liable for the remaining tax.
A.
As provided in 16 P.S. § 11011-6, as amended
by the Act of July 7, 1983, P.L. 40, No. 21, and § 1105-D
of the Tax Reform Code of 1971, 72 P.S. § 8105-D, the Recorder
of Deeds of Montgomery County, Pennsylvania, shall be the collection
agent for the realty transfer tax, including any amount payable to
the Borough based on a redetermination of the amount of tax due by
the Commonwealth of Pennsylvania of the Pennsylvania Realty Transfer
Tax, without compensation from the Borough, and is authorized to remit
such taxes to the Treasurer of the Borough on a monthly basis.
[Amended 5-1-2007 by Ord. No. 396]
B.
In order to ascertain the amount of taxes due when
the property is located in more than one political subdivision, the
Recorder shall not accept for recording such a deed unless it is accompanied
by a statement of value showing what taxes are due each municipality.
C.
On or before the 10th of each month, the Recorder
shall pay over to the Borough all local realty transfer taxes collected,
less 2% for use of the County, together with a report containing the
information as is required by the Commonwealth of Pennsylvania in
reporting collections of the Pennsylvania realty transfer tax. The
two-percent commission shall be paid to the County.
D.
Upon a redetermination of the amount of realty transfer
tax due by the Commonwealth of Pennsylvania, the Recorder shall rerecord
the deed or record the additional realty transfer tax form only when
both the state and local amounts and a rerecording or recording fee
has been tendered.
E.
The tax imposed under § 300-28A and all
applicable interest and penalties shall be administered, collected
and enforced under the Act of December 31, 1965, P.L. 1257, No. 511,
as amended, known as "the Local Tax Enabling Act," provided, that
if the correct amount of the tax is not paid by the last date prescribed
for timely payment, the Borough, pursuant to Section 1102-D of the
Tax Reform Code of 1972, 72 P.S. § 8102-D, authorizes and
directs the Department of Revenue of the Commonwealth of Pennsylvania
to determine, collect and enforce the tax, interest and penalties.
[Added 5-1-2007 by Ord. No. 396]
Every document lodged with or presented to the
Recorder of Deeds for recording shall set forth therein and as a part
of such document the true, full and complete value thereof or shall
be accompanied by a statement of value executed by a responsible person
connected with the transaction showing such connection and setting
forth the true, full and complete value thereof or the reason, if
any, that such document is not subject to tax under this article.
A copy of the Pennsylvania Realty Transfer Tax Statement of Value
may be submitted for this purpose. The provisions of this subsection
shall not apply to any excludable real estate transfers which are
exempt from taxation based on family relationship. Other documents
presented for the affixation of stamps shall be accompanied by a certified
copy of the document and statement of value executed by a responsible
person connected with the transaction, showing such connection and
setting forth the true, full and complete value thereof or the reason,
if any, why such document is not subject to tax under this article.
A.
If any part of the underpayment of tax imposed by
this article is due to fraud, there shall be added to the tax an amount
equal to 50% of the underpayment.
B.
In the case of failure to record a declaration required
under this article on the date prescribed therefor, unless it is shown
that such failure is due to reasonable cause, there shall be added
to the tax 5% of the amount of such tax if the failure is for not
more than one month, with an additional 5% for each additional month
or fraction thereof during which such failure continues, not exceeding
50% in the aggregate.
The tax imposed by this article shall become
a lien upon the lands, tenements or hereditaments or any interest
therein lying, being situated, wholly or in part, within the boundaries
of the Borough, which lands, tenements, hereditaments or interest
therein are described in or conveyed by or transferred by the deed
which is the subject of the tax imposed, assessed and levied by this
article, said lien to begin at the time when the tax under this article
is due and payable and continue until discharge by payment or in accordance
with the law, and the Borough Solicitor is authorized to file a municipal
or tax claim in the Court of Common Pleas of Montgomery County, in
accordance with the provisions of the Municipal Claims and Lien Act
of 1923, 53 P.S. § 7101 et seq., its supplements and amendments.
All taxes imposed by this article, together
with interest and penalties prescribed in this article, shall be recoverable
as other debts of like character are recovered.
The Treasurer of the Borough is charged with
enforcement and collection of the tax and is empowered to promulgate
and enforce reasonable regulations for the enforcement and collection
of the tax. The regulations which have been promulgated by the Pennsylvania
Department of Revenue under 72 P.S. § 8101-C et seq., are
incorporated into and made a part of this article.
