What sales price goes on a deed for a Sub2 transaction?

Question

I am working on a Subject-to deal and wanted to know how much transfer tax I'd pay on the deal. Of course, this depends on the purchase price. But on a Sub2 deal, what goes on the deed at the purchase price? My initial thought is that it would be the loan balance. Is this correct?

Stephen Chittenden · Answer

I don't know about Pennsylvania, but I know Maryland says you have to include the value of the debt.

Steve Babiak · Answer

It's not a one dollar sale - you are paying the principal balance. So that is the sale amount. The fact that you are not creating a new loan does not change the dollar amount of the sale.

Jerry Kisasonak · Answer

Thanks guys! @Steve Babiak The seller doesn't want anything for the property - she is okay with us just taking over the payments. So am I reading correctly that the transaction would be done with a $1 sale on the deed and a statement of value submitted when the deed is recorded with the loan amount as the value?

Steve Babiak · Answer

Section D of this form to be completed has some instructions:

http://www.revenue.pa.gov/FormsandPublications/For...

Steve Babiak · Answer

Look at example 1 under section 91.132, since a subject to is like an assumption for the purposes of setting transfer taxes due:

http://www.pabulletin.com/secure/data/vol41/41-47/...

Bill Gulley · Answer

@Steve Babiak probably knows PA tax requirements.

I'll bet it is the full purchase price as amounts financed are irrelevant to a sale price.....I know, your hopes crushed again.

And, unless there is a requirement by law to describe a sale price on a deed of conveyance, prices generally aren't shown. But your closing docs will show the price as well as tax filings.

Do not attempt to close a Sub-To or any acquisition yourself, that's deep stuff you'll get into now, Good luck :)

What sales price goes on a deed for a Sub2 transaction?

What sales price goes on a deed for a Sub2 transaction?

Most Popular Reply

6 Replies