Closing Costs in PA: What Buyers Pay, Including the Realty Transfer Tax

Quick answer: Closing costs in Pennsylvania fall into four groups: lender charges, third-party services like title insurance and settlement, government charges, and prepaids/escrow. The biggest PA-specific cost is the realty transfer tax. The state charges 1%, and most local governments add at least 1% more. Philadelphia's combined rate is 4.578%, and Pittsburgh's is generally 5%. Who pays the transfer tax is negotiable, and splitting it is common. Your Loan Estimate shows your actual expected costs.

The four parts of PA closing costs

Category	Examples	Who sets the price	Can you shop?
Lender charges	Origination fee, discount points, underwriting/processing	Your lender	Yes. Compare Loan Estimates
Third-party services	Title insurance, settlement/closing fee, appraisal, credit report, survey (if required)	Providers. PA title insurance rates are filed with the state	Partly
Government charges	Realty transfer tax, deed and mortgage recording fees	State, county, municipality, and school district	No
Prepaids and escrow	Homeowners insurance premium, prepaid interest, initial escrow deposit for property taxes	Your insurer, closing date, and tax calendars	Partly (insurance)

Lender and third-party charges are where shopping pays off. Government charges are fixed by law, but how they're split between buyer and seller is negotiated in the agreement of sale.

Pennsylvania realty transfer tax

According to the Pennsylvania Department of Revenue, the state realty transfer tax is 1% of the value of the real estate transferred. Most municipalities and school districts charge their own local transfer tax on top of that, typically another 1%, and more in some places.

Who pays? Under state rules, the buyer and seller are jointly and severally liable for the tax, which means the state can collect it from either party. In practice, the agreement of sale decides how it's split. Splitting it evenly is common in many parts of PA, but it's always negotiable, and some contracts or new-construction deals handle it differently.

Some transfers are exempt, including certain transfers between family members, such as between spouses or parents and children. Ask your title company whether an exemption applies.

Transfer tax rates in key PA markets

Location	State	Local	Total	Source
Most PA municipalities	1%	Typically 1%	Typically 2%	PA Department of Revenue
City of Philadelphia (from July 1, 2025)	1%	3.578%	4.578%	City of Philadelphia
City of Pittsburgh (Pittsburgh School District)	1%	3% city + 1% school	5%	Allegheny County
City of Pittsburgh (Baldwin-Whitehall School District)	1%	3% city + 0.5% school	4.5%	Allegheny County

The local rate is set by your municipality and school district. Before you write an offer, check the exact rate with your county Recorder of Deeds or your title company.

What that means in dollars (hypothetical $400,000 purchase)

Total transfer tax rate	Total tax	Buyer's share if split 50/50
2%	$8,000	$4,000
4.578% (Philadelphia)	$18,312	$9,156
5% (Pittsburgh)	$20,000	$10,000

This is an illustration. Your actual tax depends on the price or value used for the tax and on the terms of your agreement of sale.

Title insurance in PA

Lenders require a lender's title insurance policy. Buyers can also buy an owner's policy to protect their own equity. In Pennsylvania, title insurance rates are set in the rate manual of the Title Insurance Rating Bureau of Pennsylvania (TIRBOP), which is approved by the Pennsylvania Insurance Department. Member insurers and their agents have to use those filed rates unless the Insurance Department approves a deviation for a particular insurer. So although the premium itself is largely standardized, settlement fees, endorsements, and other title-company charges can still vary. Compare them.

TIRBOP's manual also includes discounted rates for some transactions, such as certain refinances. Ask your title agent which rate applies.

Recording fees

Your county Recorder of Deeds charges fees to record your deed and mortgage. These vary by county. In Philadelphia, the Department of Records' current fee schedule lists $278.75 to record a deed and $248.75 to record a mortgage (as of November 2026). Fees change from time to time, so check your own county's current fee schedule.

Prepaids and escrow: the costs that surprise PA buyers

Prepaids are not fees. They're money set aside for costs you would owe anyway:

• Homeowners insurance: Usually the first year's premium is paid at closing.
• Prepaid interest: Interest from your closing date through the end of that month.
• Initial escrow deposit: A cushion so your servicer can pay property taxes and insurance when they're due.

In Pennsylvania, property taxes are often billed separately by the county, the municipality, and the school district, on different schedules. That's why the escrow deposit can look high depending on when you close. If you're buying in Philadelphia or elsewhere in PA as your primary residence, apply for your homestead exemption after closing. Read our homestead exemption guide.

How to lower your PA closing costs

1. Compare lenders. Origination charges and points vary the most. Request Loan Estimates on the same day for the same scenario.
2. Negotiate seller concessions. A seller can contribute toward your closing costs, up to your loan program's limits.
3. Negotiate the transfer tax split. This is set in the agreement of sale, so talk to your agent before you sign.
4. Compare title and settlement fees. The premium follows the TIRBOP rate manual, but other title-company fees can differ.
5. Pick your closing date thoughtfully. Closing later in the month reduces prepaid interest, but it doesn't reduce your total interest cost.
6. Look into assistance programs. Some Pennsylvania programs can help with closing costs. Our homebuyer grant programs page links to search tools.

Your Loan Estimate and Closing Disclosure

Under federal rules, lenders must give you a Loan Estimate within three business days of your application. You must receive a Closing Disclosure at least three business days before closing. Compare the two line by line, and ask about anything that changed. For a broader look at the main closing cost categories, see mortgage closing costs: 3 keys.

Frequently asked questions

What is the realty transfer tax in Pennsylvania?

The state realty transfer tax is 1% of the property's value. Most municipalities and school districts add a local transfer tax, typically another 1% and more in some places. In Philadelphia, the combined rate is 4.578% (from July 1, 2025), and in the City of Pittsburgh it's generally 5%.

Who pays transfer tax in PA, the buyer or the seller?

Both are legally liable. The agreement of sale decides how it's split. Splitting it evenly is common in many parts of Pennsylvania, but it's negotiable.

Are there transfer tax exemptions in Pennsylvania?

Yes. Certain transfers are exempt, including some transfers between family members, such as between spouses or between parents and children. Your title company can tell you whether an exemption applies to your transaction.

Is title insurance the same price everywhere in PA?

The premium is generally standardized. Rates come from the TIRBOP rate manual, which the Pennsylvania Insurance Department approves, and member insurers and agents must use them unless the department has approved a deviation. Settlement fees, endorsements, and other charges can still vary.

How can I reduce closing costs in Pennsylvania?

Compare Loan Estimates from multiple lenders, negotiate seller concessions and the transfer tax split, compare title-company fees beyond the premium, and look into assistance programs you may qualify for.

Get a real estimate for your PA purchase

MortgageCS is based in Newtown, Bucks County, and works with buyers across Pennsylvania. We'll estimate your full cash to close, including transfer tax, title, and prepaids, and compare pricing from multiple lenders. Your actual costs depend on your lender, property and contract, and every loan is subject to credit approval.

Schedule a quick call with our team, get prequalified, or call or text (215) 987-2602. Learn more about our Pennsylvania services.

Sources

• Pennsylvania Department of Revenue: Realty Transfer Tax
• 61 Pa. Code Chapter 91 (Realty Transfer Tax regulations)
• City of Philadelphia: Philly's Realty Transfer Tax rate is now 4.578%
• City of Philadelphia Department of Records: Document recording and service fees
• Allegheny County: Local Realty Transfer Tax Rates
• Title Insurance Rating Bureau of Pennsylvania: Rate Manual
• CFPB: Loan Estimate and Closing Disclosure timing