[Adopted as Article 385 of the Codified Ordinances]
This realty transfer tax is levied under authority
of Article XI-D, entitled "Local Real Estate Transfer Tax," of the
Pennsylvania Real Estate Transfer Tax, which is a new Article added
by Act 77-1986 (Act of July 2, 1986, No. 77, P.L.) to the Pennsylvania
Real Estate Transfer Tax Act, Act 14-1981 (Act of May 5, 1981, No.
14, P.L. 36), as amended. The Pennsylvania Real Estate Transfer Tax
Act is codified at 72 P.S. § 8101-C et seq., and Article
XI-D is codified at 72 P.S. § 8101-D et seq. This realty
transfer tax is also levied under authority of the Local Tax Enabling
Act, Act of December 31, 1965, P.L. 1257, as amended.[1]
[1]
Editor's Note: See 53 P.S. § 6901
et seq.
A.
ASSOCIATION
COLLECTOR
CORPORATION
DOCUMENT
FAMILY FARM CORPORATION
(1)
(2)
(3)
(4)
(5)
MEMBERS OF THE SAME FAMILY
MUNICIPALITY
PERSON
REAL ESTATE
(1)
(2)
(3)
REAL ESTATE COMPANY
(1)
(2)
REAL ESTATE TRANSACTION
TITLE TO REAL ESTATE
(1)
(2)
VALUE
(1)
(2)
(3)
(4)
The following words, 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 or conducted by two or more persons.
The Recorder of Deeds of Lancaster County, Pennsylvania,
who is hereby appointed collector of the tax levied by this article.
A corporation, joint-stock association, business trust or
banking institution, which is organized under the laws of the Commonwealth
of Pennsylvania, 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 within the municipality, 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 § 270-46.
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 or 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.
The City of Lancaster.
Every natural person, association, corporation or entity
of any kind. 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, 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 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.
The making, executing, delivering, accepting or presenting
for recording of a document.
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. 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.
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 the document 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, value shall
be the actual monetary worth of the real estate within the municipality,
determined by adjusting the assessed value of the real estate for
local real estate tax purposes for the common level ratio of assessed
values to market values of the taxing district in which the municipality
is located as established by the State Tax Equalization Board, or
a commensurate part of the assessment where the assessment includes
other real estate.
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.
B.
The singular includes the plural and the masculine
includes the feminine and neuter.
A tax is hereby levied and imposed, for general
municipal purposes, on every real estate transaction at the rate of
1% of the value of the real estate represented by the document involved
in the real estate transaction.
A.
The tax shall be payable at the earlier of the time
the document is presented for recording, within 30 days of acceptance
of the document or within 30 days of becoming an acquired company.
B.
If the real estate is located partially within and
partially outside the municipality, the tax shall be calculated on
the value of the portion within the municipality.
C.
The tax imposed hereunder shall be due and payable
to the collector, as a joint and several liability, by 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. In the case of an acquired company,
the company shall also have liability for payment of the tax. All
such persons shall also be liable for any penalties imposed under
this article.
D.
It is the intent of this article that the entire burden
of the tax imposed on a real estate transaction by the municipality
and other political subdivisions shall not exceed the limitations
prescribed in Section 8 of the Local Tax Enabling Act (53 P.S. § 6908),
so that if any other political subdivision imposes a tax on real estate
transactions taxed under this article, the provisions of such Section
8 shall apply.
The payment of the tax imposed hereunder shall
be evidenced by the collector affixing on the document an official
stamp or writing setting forth the date of payment of the tax and
amount of tax paid.
The United States, the Commonwealth of Pennsylvania
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 real estate transaction from liability for the
tax.
A.
The tax imposed by this article shall not be imposed
upon:
(1)
A transfer to the Commonwealth of Pennsylvania, 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 such reconveyance is made within one
year from the date of condemnation.
(2)
A document which the municipality 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'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 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 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 collector 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 for no or 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 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 municipality 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 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:
(a)
The grantee shall directly use such real estate
for the primary purpose of manufacturing, fabricating, compounding,
processing, publishing, research and development, transportation,
energy conservation, energy production, pollution control, warehousing
or agriculture; and
(b)
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
tax exempt status pursuant to Section 501(c)(3) of the Internal Revenue
Code of 1954 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. 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 § 270-44, 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:
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, 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 collector
for recording and for the affixation of the official stamp or writing
evidencing payment of the tax. Such declaration shall set forth the
value of real estate holdings of the acquired company in the municipality.
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 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 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.
Every document lodged with or presented to the
collector for recording shall set forth therein and as 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 article. The provisions
of this section shall not apply to any excludable real estate transfers
which are exempt from taxation based on family relationship, provided
that the relationship is specified in the deed, instrument or writing.
Documents which are not to be recorded shall be presented to the collector
and shall be accompanied by a certified copy of the 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 article. Evidence of payment shall
be affixed to the original document and the certified copy. The certified
copy and statement of value shall be filed with the collector.
A.
It shall be unlawful for any person to:
(1)
Make, execute, deliver, accept or present for recording
or cause to be made, executed, delivered, accepted or presented for
recording any document without the full amount of tax thereon being
duly paid;
(2)
Fail to record a declaration of acquisition, as required
by this article;
(3)
Fraudulently affix to any document any forged evidence
of payment; or
(4)
Fail, neglect or refuse to comply with or violate
other provisions of this article or any rules and regulations promulgated
by the municipality under this article, or any rules and regulations
of the Pennsylvania Department of Revenue to the extent applicable
to the tax levied hereunder.
B.
Any person violating any of the provisions of this
section shall be guilty of a summary offense.
C.
A person who makes a false statement of value or declaration
of acquisition, when he does not believe the statement or declaration
to be true, is guilty of a misdemeanor of the second degree.
A.
If any tax owing under the terms of this article shall
not be paid when due, 10% of the amount of the tax shall be added
and collected as an initial penalty for nonpayment or underpayment
of the tax.
B.
In addition, if any tax owing under the terms of this
article shall not be paid when due, a penalty shall accrue on the
amount of the unpaid tax at the rate of 1% per month or fractional
part of a month, on the amount of the unpaid tax, from the due date
until the amount of the tax is paid in full.
C.
In addition, in the case of failure of any acquired
company to record a declaration of acquisition, as required by this
article, unless it is shown to the satisfaction of the municipality
that such failure is due to reasonable cause, a penalty shall accrue
on the amount of the unpaid tax at the rate of 5% per month or fractional
part of a month, on the amount of the unpaid tax, from the due date
until the amount of the tax is paid in full. This penalty shall be
in addition to all other penalties, but shall not in the aggregate
exceed 50% of the amount of the unpaid tax.
D.
In addition, if any part of any underpayment of tax
is due to fraud, there shall be added to the tax an amount equal to
50% of the underpayment.
E.
In addition, if the municipality files suit in order
to collect the amount of any tax not paid when due under this article,
at the discretion of the court, any person liable for payment of the
tax shall also be liable for reasonable attorneys' fees incurred by
the municipality in prosecution of the suit.
F.
No document upon which tax is imposed by this article
shall at any time be made the basis of any action or other legal proceeding,
nor shall proof thereof be offered or received in evidence in any
court of this commonwealth or recorded in the office of any Recorder
of Deeds of any county of this commonwealth unless the tax imposed
hereunder shall have been paid in full and evidence of payment shall
have been affixed thereto by the collector.
The tax imposed by this article, together with
all penalties, shall be a lien against the real estate to which the
document relates and, in the case of an acquired company, the real
estate owned by the acquired company. The lien shall date from the
time when the tax is due and payable and shall continue until discharged
by payment in full of the tax, together with all penalties. In order
to enforce the lien, the municipality may proceed under the Municipal
Claims and Liens Act of 1923, 53 P.S. § 7101 et seq., or
in any other appropriate manner.
The tax imposed under 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, and the Sheriff or other officer conducting such 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.
In order to determine whether the proper amount of
tax has been paid, without limiting any other rights of the municipality,
the municipality shall have the right to review all documents or records
relating to any real estate transaction or any related transactions
and to take such other steps as the municipality shall deem necessary
or appropriate, including a review or audit of any documents or records
of any party to a real estate transaction to determine the fair market
value of the real estate or any other relevant matter as determined
by the municipality. Upon request of the municipality and at such
place and time as specified by the municipality, any party shall make
available to the municipality any documents or records requested by
the municipality.
B.
In the event that any tax is not paid when due, the
municipality may enforce payment of the tax, together with all penalties,
by suit in assumpsit or any other appropriate means.
A.
As provided in 16 P.S. § 11011-6, the Recorder
of Deeds shall be the collection agency for this tax, without compensation
from the municipality.
B.
In order to ascertain the amount of taxes due when
the property is located in more than one political subdivision, the
collector shall not accept for recording any document unless it is
accompanied by a statement of value showing what taxes are due each
political subdivision.
C.
On or before the tenth day of each month, the collector
shall pay over to the municipality all taxes collected under this
article, less 2% for use of the county, and shall also provide a report
containing the information 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.
In accordance with Act 77-1986,[1] any Recorder of Deeds who shall record any document upon
which tax is imposed under this article without payment of tax as
required under this article, as is indicated in the document or accompanying
statement of value, shall, upon summary conviction, be sentenced to
pay a fine of $50 and costs of prosecution.
[1]
Editor's Note: See 72 P.S. § 8101-D
et seq.
The municipality may promulgate and enforce
reasonable rules and regulations for the interpretation, collection
and enforcement of the tax.
A.
To the extent this article imposes a tax on a real
estate transaction which is subject to the Commonwealth of Pennsylvania
realty transfer tax imposed by Act 77-1986[1] and to the extent not inconsistent herewith or with rules
or regulations adopted by the municipality, this article shall be
interpreted in the same manner as Act 77-1986 and in accordance with
regulations promulgated thereunder.
[1]
Editor's Note: See 72 P.S. § 8101-D
et seq.
B.
This article shall impose a tax on all transactions
which the municipality is permitted to tax under Act 77-1986 to the
fullest extent permissible.
This article shall become effective July 1,
1987, and shall continue in force hereafter without annual reenactment.
