[Adopted 10-19-1966 by Ord. No. 1514[1]]
[1]
Editor's Note: This ordinance was reenacted
9-20-1967 by Ord. No. 1535 for the year 1968 and 9-18-1968 by Ord.
No. 1564 for the year 1969. [Annual reenactment of taxation ordinances
is no longer required pursuant to a 1967 amendment to Section 7 of
the Local Tax Enabling (see 53 P.S. § 6907).]
[Amended 1-21-1987 by Ord. No. 3029]
As used in this article, the following terms
shall have the meanings indicated:
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 a decedent's estate.
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, 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 § 138-11 of this chapter.
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 half-blood or legal adoption shall be treated as if they
were related by 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.
All lands, tenements or hereditaments within
the Township of Lower Merion, 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.
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 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 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.
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 or 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 the transfer and
not removed thereby or between the grantor, the agent or principal
of the grantor of a related corporation, association or partnership
and the grantee existing before or effective with the transfer.
[Amended 1-21-1987 by Ord. No. 3029]
A.
The Township of Lower Merion adopts the provisions
of Article XI-D of the Tax Reform Code of 1971 and imposes a realty
transfer tax as authorized under that Article, subject to the rate
limitations therein. 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.
[Amended 11-21-2007 by Ord. No. 3831]
B.
It is the intent of this article that the entire burden
of the tax imposed herein on a person or transfer shall not exceed
the limitations prescribed in the Local Tax Enabling Act, Act of December
31, 1965, P.L. 1256, 53 P.S. § 6901 et seq., so that if
any other political subdivision shall impose or hereafter shall impose
such tax on the same person or transfer then the tax levied by the
Township of Lower Merion under the authority of that Act shall, during
the time such duplication of the tax exists, except as hereinafter
otherwise provided, be 1/2 of the rate, and such one-half rate shall
become effective without any action on the part of the Board of Commissioners;
provided, however, that the Township of Lower Merion and any other
political subdivisions which impose such tax on the same person or
transfer may agree that, instead of limiting their respective rates
to 1/2 of the rate herein provided, they will impose respectively
different rates, the total of which shall not exceed the maximum rate
permitted under the Local Tax Enabling Act.
C.
Any tax imposed under this article 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, 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 Section 806 of the Act
of April 9, 1929, as amended, known as the “Fiscal Code,”
or the maximum interest rate permitted under the Municipal Claims
and Tax Liens Act for tax claims.
[Amended 11-21-2007 by Ord. No. 3831]
[Amended 1-21-1987 by Ord. No. 3029]
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 the 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 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.
The tax hereby imposed shall be paid to the
Township Treasurer, and the person liable for the tax shall file with
the Township Treasurer, upon payment of the tax, a record of the real
estate transfer, setting forth the true, complete and actual value
of the real estate involved, the names of the parties, the location
of the real estate and such other information as may be required.
The report shall be signed by the person liable for the tax or for
him by a title insurance company, licensed real estate broker or attorney
at law.
[Amended 11-21-2007 by Ord. No. 3831]
The tax imposed under §138-2 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, Lower Merion Township, pursuant to Section 1102-D of the Tax Reform Code of 1971, authorizes and directs the Department of Revenue of the Commonwealth of Pennsylvania to determine, collect and enforce the tax, interest and penalties.
Every document, when lodged with or presented
to any recorder of deeds for recording or to the Township Engineer
or his agent for registration in accordance with Ordinance No. 475
of the Township requiring the registration of deeds,[1] shall set forth therein and as part of such document the
true, full, complete and actual value thereof or shall be accompanied
by either a certificate from a title company or an affidavit executed
by a responsible person connected with the transaction showing such
connection and setting forth the true, full, complete and actual value
thereof.
[Amended 1-21-1987 by Ord. No. 3029]
The Township Engineer is authorized and directed to refuse to register any document unless the tax imposed under § 138-2 hereof has been paid and unless the payment of the tax is evidenced by the certificate upon the document as required hereby.
[Amended 1-21-1987 by Ord. No. 3029]
The United States, the commonwealth or any of
their instrumentalities, agencies or political subdivisions shall
be exempt from payment or the tax imposed by this article. The exemption
of such governmental bodies shall not, however, relieve any other
party to a transaction from liability of the tax.
[Amended 1-21-1987 by Ord. No. 3029]
A.
The tax imposed by § 138-2 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 that
said reconveyance is made within one year from the date of condemnation.
(2)
A document in which the Township of Lower Merion 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 a Sheriff's 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 or 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 that 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, 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 or nominal actual consideration
from a trustee to a beneficiary of an ordinary trust.
(10)
A transfer for no or nominal actual consideration
from trustee to successor trustee.
(11)
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 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 a 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 subsection.
(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 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 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 of authority to a grantee or 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 only
if 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 transferor 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 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 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. 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.
[Amended 1-21-1987 by Ord. No. 3029]
Except as otherwise provided in § 138-9, 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 purposes of this article, corporations and associations are entities separate from their members, partners, stockholders or shareholders.
[Amended 1-21-1987 by Ord. No. 3029]
A.
A real estate company is an acquired company upon
a change in the ownership interest in the company, however affected,
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 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 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.
[Amended 1-21-1987 by Ord. No. 3029[1]]
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 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 by deed of real estate
which was previously sold under a land contract by the grantor, a
credit for the amount of the 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.
[Added 1-21-1987 by Ord. No. 3029]
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
of calculating the rental charge is established.
[Added 1-21-1987 by Ord. No. 3029]
The tax herein imposed 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.
[Added 1-21-1987 by Ord. No. 3029]
A.
If any part of any 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.
[Added 1-21-1987 by Ord. No. 3029]
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 Township of Lower Merion, which lands, tenements, hereditaments
or interest therein are described in or conveyed by or transferred
by the document 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 to continue until discharge
by payment, or in accordance with the law, and the 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 Liens Act of 1923, 53 P.S. § 7101 et seq., its supplements
and amendments.
[Added 1-21-1987 by Ord. No. 3029]
A.
As provided in 16 P.S. § 11011-6, as amended
by Act of July 7, 1983, P.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 Township of Lower Merion 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 Township
of Lower Merion.
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 Township of Lower Merion 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
have been tendered.
[Added 11-21-2007 by Ord. No. 3831]
A.
If any person fails to pay any tax imposed under this
article for which that person is liable, the Department of Revenue
of the Commonwealth of Pennsylvania is authorized to make a determination
of additional tax, penalty and interest due by the person pursuant
to regulations applicable to such determinations.
B.
Any tax that the Department of Revenue determines
to be due under this article and that remains unpaid after demand
for the same, and all penalties and interest thereon, shall be a lien
in favor of the Township upon the property, both real and personal,
of the person but only after the lien has been entered and docketed
of record by the prothonotary of Montgomery County.
[Added 11-21-2007 by Ord. No. 3831]
A.
Whenever the amount due upon determination, redetermination
or review is less than the amount paid on account thereof, the Township
shall refund the difference.
B.
Where there has been no determination of unpaid tax,
application for refund shall be made to the Township in the manner
prescribed by the Act of December 31, 1965 (P.L. 1257, No. 511), known
as "The Local Tax Enabling Act," or as otherwise provided by law.
It shall be unlawful for any person to:
A.
Fail to pay the tax imposed by this article.
B.
Fail to place upon a document the certificate required
by this article or make any false statement in such certificate.
C.
Fail, neglect or refuse to comply with or violate
the rules and regulations adopted and promulgated by the Treasurer
under the provisions of this article or by the Department of Revenue.
[Amended 11-21-2007 by Ord. No. 3831]
[Amended 9-21-1977 by Ord. No. 1802; 11-21-2007 by Ord. No.
3831]
A.
Any person violating any of the provisions of this
article shall be liable to a fine or penalty not exceeding $600 and,
further, shall be required to pay the amount of the tax, together
with interest as is otherwise provided for herein, which should have
been paid on the document or documents.
B.
If any part of any underpayment of tax imposed under
this article is due to fraud, an amount equal to 50% of the underpayment
shall be added to the tax.
