Why is transfer tax on the full purchase price of the home including Realtor Commissions paid for at closing? This is a tax on a

Asked by Glenn Freezman, Horsham, PA Sun Apr 17, 2011

"salary/commission and will be taxed as income? Is this a hidden Double taxation When we record a deed it includes the total value of the deed including all Realtor Commissions. On a 400,000 purchase in Philadelphia the transfer tax is 4%. So at 6% commission, for instance, the buyer and seller would split the 4% to pay for the transfer tax of the realtors commissions in the amount of $960. Why? We are paying tax on salaried taxable commission

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Dan Tabit, Agent, Issaquah, WA
Sun Apr 17, 2011
BEST ANSWER
Glenn,
Because it nets the government the most money. If the only taxed the net, net whatever revenue they missed would be made up somewhere else.
1 vote
Mack McCoy, Agent, Seattle, WA
Sun Apr 17, 2011
I don't know, Glenn . . . but one corollary is the gasoline tax; when I buy an item at the store, I'm paying tax on the total retail price, even though taxes have been paid the fuel for transporting that item, which has been factored into the price . . . and actually, the item or its components have been subject to taxation at several other points from manufacture to my shopping bag.

Frankly, I'm fine with it. I'm not sure that we need to bring a HUD to the assessor's office and say, well, this title policy has already been taxed . . .
1 vote
Sushil, Home Owner, Philadelphia, PA
Wed Apr 3, 2013
As a consumer I see it as double taxation. Government is charging taxes on one item and when that item becomes something else then another tax on that and end consumer pays all the taxes. That's why I believe there should be VAT (Value added tax).
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