Montco Costs and taxes of selling a house in Pennsylvania
The main Pennsylvania-specific cost of selling is the realty transfer tax: 1% to the state plus local tax, for 2% in total in Montgomery County, usually split between buyer and seller. If the house was your main home for 2 of the last 5 years, Pennsylvania excludes the whole gain from its income tax, and federal law excludes up to $250,000 ($500,000 on a joint return).
Realty transfer tax
- State: 1% of the property's value.
- Montgomery County total: 2% (state plus local), collected by the Recorder of Deeds.
- Who pays: buyer and seller are both legally responsible to the state. Splitting it 50/50 is the custom in Pennsylvania, but it's negotiable in the agreement of sale.
Example: on a $300,000 sale in Montgomery County, 2% is $6,000, so about $3,000 each if split.
Other closing costs
| Cost | Typical amount |
|---|---|
| Deed recording fee, Montgomery County | $87.75 base (more for extra names, pages or parcels) |
| Municipal resale inspection / U&O | Varies by town (e.g. Bridgeport $100 per unit) |
| Agent commission (if listed) | Negotiable |
| Mortgage payoff, prorated property taxes, liens | From your payoff letter and title search |
Federal tax on the gain
If you owned and lived in the home as your main residence for at least 2 of the 5 years before the sale, you can exclude up to $250,000 of gain, or $500,000 on a joint return if the rules are met (26 U.S.C. §121). Gain above that, or on a property that wasn't your home, is taxable.
Pennsylvania income tax on the gain
Pennsylvania excludes the entire gain, with no dollar cap, on a principal residence you owned and used for at least 2 of the 5 years before the sale (72 P.S. §7303(a)(3)(vii)). It generally can't be used again within 2 years, with exceptions for job or health changes. If part of the property was a rental, only the home portion qualifies.
For inherited houses, see selling an inherited house in PA.
Common questions
How much is the transfer tax in Montgomery County, PA?
2% in total: 1% state plus local tax. Buyer and seller customarily split it, but who pays is negotiable in the agreement of sale.
Who pays the realty transfer tax in Pennsylvania?
Both buyer and seller are legally responsible to the state, and the custom is a 50/50 split written into the agreement of sale.
Do I pay Pennsylvania tax when I sell my house?
Not on the gain from your main home if you owned and lived in it for 2 of the 5 years before the sale. Pennsylvania excludes the whole gain with no dollar cap (72 P.S. §7303(a)(3)(vii)).
How much gain can I exclude from federal tax?
Up to $250,000, or $500,000 on a qualifying joint return, if you owned and used the home as your main residence for 2 of the 5 years before the sale (26 U.S.C. §121).
Sources: Montgomery County realty transfer tax; PA Department of Revenue, realty transfer tax; Montgomery County Recorder of Deeds fees; 26 U.S.C. §121; PA Personal Income Tax Guide, net gains. Checked November 15, 2026.