Estimate the documentary transfer tax for any Peninsula home sale — county rate plus any applicable city tax.
California's documentary transfer tax is imposed under Revenue and Taxation Code Section 11911. The state mandates a county-level tax of $1.10 per $1,000 of the transferred value — which means $1.10 per $1,000 of the full purchase price. In addition, charter cities may impose their own city-level transfer tax on top of the county rate. Most San Mateo County cities rely on the county rate only; in Mountain View, Palo Alto, and San Jose the combined rate reaches $4.40/$1,000 — four times the baseline — and in the City of San Mateo it reaches $6.10/$1,000.
Transfer tax is customarily paid by the seller in San Mateo County and in most Santa Clara County cities. This is a local custom, not a legal requirement — either party can negotiate to pay it, and the allocation is memorialized in the purchase contract. Where a city conveyance tax applies (Mountain View, Palo Alto, San Jose, the City of San Mateo), custom typically splits the city portion between buyer and seller. At $1.10 per $1,000 on a $3M sale, the county tax is $3,300; in the $4.40 combined-rate cities the total on that sale reaches $13,200, making the allocation more material in competitive offer situations.
Most San Mateo County cities impose only the county rate of $1.10/$1,000 — Atherton, Belmont, Burlingame, East Palo Alto, Foster City, Menlo Park, Millbrae, Redwood City, San Carlos, Woodside, and most others. Two add a city tax: the City of San Mateo adds $5.00/$1,000 under $10 million for a combined $6.10/$1,000 (1.5% at $10 million and above, per Measure CC), and Hillsborough adds $0.30/$1,000 for a combined $1.40/$1,000. In Santa Clara County, Palo Alto, Mountain View, and San Jose each add a city conveyance tax of $3.30/$1,000 for a combined $4.40/$1,000. Mountain View sales over $6 million pay a $15/$1,000 city rate under Measure G, and San Jose sales over $2.3 million pay an additional Measure E tax of 0.75% to 1.5% of the full price. Los Gatos, Milpitas, Morgan Hill, Monte Sereno, Campbell, Cupertino, Saratoga, and Sunnyvale pay the county rate only. Always verify current rates with your title company before closing.
For sellers, the documentary transfer tax paid is deducted as a selling expense that reduces your taxable capital gain — it increases the cost basis adjustments and reduces gain. For buyers, transfer tax you pay is not currently deductible as an expense but adds to your cost basis in the property for future capital gains calculation. Consult a CPA for how this applies to your specific situation, particularly if you have significant gain in a sale or are planning an exchange.
Transfer tax is one line item in the full seller net sheet calculation. Lisa M. Lum prepares a complete estimated net sheet for every seller — including transfer tax, commissions, escrow fees, title insurance, and prorated property tax — before you commit to a list price.
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