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, cities within a county 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; several Santa Clara County cities impose additional city taxes. In cities like Mountain View, Palo Alto, and San Jose, the combined rate reaches $3.30/$1,000 — triple the baseline.
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. At $1.10 per $1,000 on a $3M sale, the total county tax is $3,300. In cities with higher combined rates (Mountain View, Palo Alto, San Jose), the combined tax on a $3M sale can reach $9,900, 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, Foster City, Hillsborough, Menlo Park, Millbrae, Redwood City, San Carlos, San Mateo, and most others. In Santa Clara County, Mountain View, Palo Alto, and San Jose each add $2.20/$1,000 for a combined $3.30/$1,000. Los Gatos, Milpitas, Morgan Hill, and Monte Sereno add smaller city amounts. East Palo Alto (San Mateo County) has a higher city rate as well. 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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