[Ord. 490, passed 12-8-1986]
This chapter shall be known and may be cited as the "Realty
Transfer Tax Ordinance of the Borough of Brookhaven" or just the "realty
transfer tax."
[Ord. 490, passed 12-8-1986]
A realty transfer tax for general revenue purposes is, hereby
imposed upon the transfer of real estate or interest in real estate
situated within the 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.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
For the purpose of this chapter, the following definitions shall
apply unless the context clearly indicates or requires a different
meaning.
ASSOCIATION
A partnership, limited partnership or any other form of unincorporated
enterprise, owned or conducted by two or more persons other than a
private trust or decedent's estate.
CORPORATION
A corporation, joint-stock association, business trust or
banking institution which is organized under the laws of this Commonwealth,
the United States, or any other state, territory or foreign country,
or dependency.
DEPARTMENT
The Department of Revenue of this Commonwealth.
DOCUMENT
Any deed, instrument or writing which conveys, transfers,
devises, vests, confirms or evidences any transfer or devise 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 § 892.08.
FAMILY FARM CORPORATION
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:
(A)
Recreational activities such as, but not limited to, hunting,
fishing, camping, skiing, show competition or racing;
(B)
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;
(D)
Stockyard and slaughterhouse operations; or
(E)
Manufacturing or processing operations of any kind.
FAMILY FARM PARTNERSHIP
A partnership of which at least 75% of its assets are devoted
to the business of agriculture and at least 75% of the interests in
the partnership are continuously owned by members of the same family.
The business of agriculture shall not be deemed to include:
(A)
Recreational activities such as, but not limited to, hunting,
fishing, camping, skiing, show competition or racing;
(B)
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;
(D)
Stockyard and slaughterhouse operations; or
(E)
Manufacturing or processing operations of any kind.
LIVING TRUST
Any trust, other than a business trust, intended as a will
substitute by the settlor which becomes effective during the lifetime
of the settlor, but from which trust distributions cannot be made
to any beneficiaries other than the settlor prior to the death of
the settlor.
MEMBERS OF THE SAME FAMILY
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, a spouse
of any of the foregoing and the estate 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.
ORDINARY TRUST
Any trust, other than a business trust or a living trust,
which takes effect during the lifetime of the settlor and for which
the trustees of the trust take title to property primarily for the
purpose of protecting, managing or conserving it until distribution
to the named beneficiaries of the trust. An "ordinary trust" does
not include a trust that has an objective to carry on business and
divide gains, nor does it either expressly or impliedly have any of
the following features: the treatment of beneficiaries as associates,
the treatment of the interests in the trust as personal property,
the free transferability of beneficial interests in the trust, centralized
management by the trustee or the beneficiaries, or continuity of life.
PERSON
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.
REAL ESTATE
Any lands, tenements or hereditaments within this Commonwealth,
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 of land, but
excluding permanently attached machinery and equipment in an industrial
plant; or a condominium unit; or a tenant-stockholder's interest
in a cooperative housing corporation, trust or association under a
proprietary lease or occupancy agreement.
REAL ESTATE COMPANY
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:
(A)
Derive 60% or more of its annual gross receipts from the ownership
or disposition of real estate; or
(B)
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.
TITLE TO REAL ESTATE
(A)
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
(B)
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 approximating 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.
TRANSACTION
The making, executing, delivering, accepting or presenting
for recording of a document.
VALUE
(A)
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.
(B)
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 purposes for the common level ratio
of assessed values to market values of the taxing district as established
by the State Tax Equalization Board, or a commensurate part of the
assessment where the assessment includes other real estate;
(C)
In the case of an easement or other interest in real estate
the value of which is not determinable under Division (1) or (2) above,
the actual monetary worth of such interest; or
(D)
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.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
(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 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, whichever
first occurs.
(B) The payment of the tax imposed in this chapter shall be evidenced
by the affixing of an official stamp or writing by the Recorder of
Deeds whereon the date of the payment of the tax, the amount of the
tax and the signature of the collecting agent shall be set forth.
(C) It is the intent of this chapter that the entire burden of such tax
on a person or transfer shall not exceed the limitations prescribed
in the Local Tax Enabling Act, 53 P.S. §§ 6924.101
et seq., as amended, so that if any other political subdivision has
imposed or hereafter imposes such tax on the same person or transfer,
then the tax levied by the Borough under the authority of such Act
shall, during the time such duplication of the tax exists, except
as hereinafter otherwise provided, be one-half of the rate, and such
one-half rate shall become effective without any action on the part
of the Borough. However, the Borough and any other political subdivision
which imposes such tax on the same person or transfer may agree that,
instead of limiting their respective rates to one-half of the rate
herein provided, they will impose, respectively, different rates,
the total of which rates shall not exceed the maximum rate permitted
under the Local Tax Enabling Act.
[Ord. 490, passed 12-8-1986]
The United States, the Commonwealth and all of their instrumentalities,
agencies or political subdivisions shall be exempt from payment of
the tax imposed by this chapter. However, the exemption of such governmental
bodies shall not relieve any other party to a transaction from liability
for the tax.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
(A) The tax imposed in § 892.04 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 Commonwealth 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, township, school
district or county of a tax delinquent property at sheriff sale or
tax claim bureau sale;
(4)
A transfer for no or 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 or 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 or wife prior to the granting of
the final decree in divorce, between parent and child or the spouse
of such child, 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;
(7)
A transfer for no or nominal actual consideration of property
passing by testate or intestate succession from a personal representative
of a decedent to the decedent's devisee or heir;
(8)
A transfer for no 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 that are entitled to receive the property
or proceeds from the sale of the property under the trust, whether
or not such beneficiaries are contingent or specifically named. A
trust clause which identifies the contingent beneficiaries by reference
to the heirs of the trust settlor as determined by the laws of the
intestate succession shall not disqualify a transfer from the exclusion
provided by this clause. 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 or nominal actual consideration from a trustee
of a living trust from the settlor of the living trust. No such exemption
shall be granted unless the recorder of deeds is presented with a
copy of the living trust instrument;
(10)
A transfer for no or nominal actual consideration from a trustee
of an ordinary trust to a specifically named beneficiary that is entitled
to receive the property under the recorded trust instrument or to
a contingent beneficiary where the transfer of the same property would
be exempt if the transfer was made by the grantor of the property
into the trust to that beneficiary. However, any transfer of real
estate from a living trust during the settlor's lifetime shall
be considered for the purposes of this article as if such transfer
were made directly from the settlor to the grantee;
(11)
A transfer for no or nominal actual consideration from a trustee
of a living trust after the death of the settlor of the trust or from
a trustee of a trust created pursuant to the will of a descendent
to a beneficiary to whom the property is devised or bequeathed;
(12)
A transfer for no or nominal actual consideration from the trustee
of a living trust to the settlor of the living trust if such property
was originally conveyed to the trustee by the settlor;
(13)
A transfer for no or nominal actual consideration from trustee
to successor trustee;
(14)
A transfer:
(a)
For no or nominal actual consideration between principal and
agent or straw party; or
(b)
From or to an agent or straw party where, if the agent or straw
party were his or her principal, no tax would be imposed under this
Division (A)(14)(b) 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 or her
principal, there is a rebuttable presumption that the property is
the property of the grantee in his or her individual capacity if the
grantee claims an exemption from taxation under this clause;
(15)
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 Division (A)(15);
(16)
A transfer from a corporation or association of real estate
held 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 or her 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;
(17)
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;
(18)
A transfer from a nonprofit industrial development agency or
authority to a grantee purchasing directly from it, but only if:
(a)
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
(b)
The agency or authority has the full ownership interest in the
real estate transferred.
(19)
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 another person;
(20)
Any transfer between religious organizations or other bodies
or persons holding title for a religious organization if such real
estate is not being or had not been used by such transferor for commercial
purposes;
(21)
A transfer to a conservancy which possesses a tax-exempt status
pursuant to § 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 preservation of land for historic, recreational,
scenic, agricultural or open-space opportunities; or a transfer from
such a conservancy to the United States, the Commonwealth or to any
of their instrumentalities, agencies or political subdivisions; or
any transfer from such a conservancy where the real estate is encumbered
by a perpetual agricultural conservation easement as defined by the
Act of June 30, 1981 (Pub. L. 128, No. 43), known as the Agricultural
Area Security Law, being 3 P.S. §§ 901 to 915, and
such conservancy has owned the real estate for at least two years
immediately prior to the transfer;
(22)
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;
(23)
A transfer of real estate devoted to the business of agriculture
to a family farm partnership by a member of the same family, which
family directly owns at least 75% of the interests in the partnership;
(24)
A transfer between members of the same family of an ownership
interest in a real estate company, family farm corporation or family
farm partnership which owns real estate;
(25)
A transaction wherein the tax due is $1 or less; and
(26)
Leases for the production or extraction of coal, oil, natural
gas or minerals and assignments thereof.
(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. 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 chapter.
[Ord. 490, passed 12-8-1986]
Except as otherwise provided in § 892.06, 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 section, corporations and associations are
entities separate from their members, partners, stockholders or shareholders.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
(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 if the change,
by 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 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 chapter.
(C) A family farm partnership is an acquired company when, because of
voluntary or involuntary dissolution, it ceases to be a family farm
partnership or when, because of transfer of partnership interests
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 partnership under this chapter.
(D) Within 30 days after becoming an acquired company, such 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 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.
[Ord. 490, passed 12-8-1986]
(A) Where there is a transfer of residential property by a licensed real
estate broker, which property was transferred to him or her 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 or her shall be given to him or her 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 to the grantor toward the tax due upon the transfer.
(D) Where there is a conveyance by 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 to 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 of tax due, no refund or carry-over credit
shall be allowed.
[Ord. 490, passed 12-8-1986]
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.
[Ord. 490, passed 12-8-1986]
The tax imposed in this chapter shall be fully paid and shall
have priority out of the proceeds of any judicial sale of real estate
before payment of any other obligation, claim, lien, judgment, estate
or cost of the sale, and of the writ upon which the sale is made,
except the state realty transfer tax. The Sheriff or other officer
conducting such sale shall pay the tax out of the first moneys paid
to him or her in connection therewith. If the proceeds of the sale
are insufficient to pay the entire tax, the purchaser shall be liable
for the remaining tax.
[Ord. 490, passed 12-8-1986]
(A) As provided in 16, P.S. § 11011-6, as amended by the Act
of July 7, 1983 (Pub. L. 40, No. 21), the Recorder of Deeds shall
be the collection agent for the local realty transfer tax, including
any amount payable to the Borough based on a redetermination of the
amount of tax due by the Commonwealth of the state realty transfer
tax, without compensation from the Borough.
(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 a deed for recording, unless it is accompanied by a statement
of value showing what taxes are due each municipality.
(C) On or before the tenth day 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 in reporting collections of the
state realty transfer tax. The 2% commission shall be paid to the
county.
(D) Upon a redetermination of the amount of realty transfer tax due by
the Commonwealth, the Recorder shall re-record the deed or record
the additional realty transfer tax form only when both the state and
local amounts and a re-recording or recording fee has been tendered.
[Ord. 490, passed 12-8-1986]
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, why such
document is not subject to tax under this chapter. A copy of the Pennsylvania
Realty Transfer Tax Statement of Value may be submitted for this purpose.
This section 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 each document and 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, why such document is not subject to tax under
this chapter.
[Ord. 490, passed 12-8-1986]
(A) If any part of any underpayment of tax imposed by this chapter 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
chapter 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.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
The tax imposed under § 892.01 and all applicable
interest and penalties shall be administered, collected and enforced
under the "The Local Tax Enabling Act"; provided, that if the correct
amount of tax is not paid by the last date prescribed for timely payment,
the Borough, pursuant to § 1102-D of the Tax Reform Code
of 1971 (72 P.S. § 8102-D), as amended, authorizes and directs
the Department of Revenue of the Commonwealth to determine, collect
and enforce the tax, interest and penalties.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
Any tax imposed under § 892.02 that is not paid by
the date the tax is due shall bear interest as prescribed for interest
on delinquent municipal claims under the Act of May 16, 1923 (Pub.
L. 207, No. 153) (53 P.S. §§ 7101 et seq.), as amended,
known as "The Municipal Claims and Tax Liens Act." The interest rate
shall be the lesser of the interest rate imposed upon delinquent Commonwealth
taxes as provided in § 806 of the Act of April 9, 1929 (Pub.
L. 343, No. 176) (72 P.S. § 806), as amended, known as "The
Fiscal Code," or the maximum interest rate permitted under the Municipal
Claims and Tax Liens Act for tax claims.
[Ord. 490, passed 12-8-1986; Ord. 710, passed 10-2-2006]
All regulations promulgated by the Department of Revenue pursuant
to § 1103-D of the Tax Reform Code of 1971 (72 P.S. § 8103-D)
are incorporated into and made a part of this chapter as if fully
set forth herein.