California Real Estate Transfer Tax: Rates, Who Pays and Exemptions

What is the California Real Estate Transfer Tax?

When a property in California is sold, the deed can’t be recorded until a documentary transfer tax is paid.

It’s a local tax, charged by counties and, in many places, by cities as well. In most of the state it costs $1.10 per $1,000 of the price. In some cities it runs to several percent.

Because it’s rolled into closing costs, it’s easy to miss until settlement.

On a $1 million rental in Oakland, it comes to more than $16,000. In an unincorporated part of the same county, it’s $1,100.

The short answer:

• Who sets it: counties, under California’s Documentary Transfer Tax Act, with many cities adding their own tax.
• Base rate: $0.55 per $500 of value, which is $1.10 per $1,000.
• City taxes: some cities charge much more, from about 1% to over 5% of the price.
• Who pays: state law doesn’t say. It’s agreed in the purchase contract and often follows local custom.
• Taxes: you can’t deduct it as an expense in the year you pay it. A buyer adds it to the property’s basis; a seller’s payment reduces the gain on the sale.

What is the California documentary transfer tax?

California’s Documentary Transfer Tax Act lets counties tax deeds that transfer real property when it’s sold. Under Revenue and Taxation Code §11911, a county’s board of supervisors can adopt the tax by ordinance. The rate is $0.55 for each $500 of value, or part of $500. It only applies when the value is more than $100. Any loan or lien that stays on the property after the sale isn’t counted.

The tax is collected by the county recorder when the deed is recorded. The deed has to show the amount of tax due. The recorder won’t record a taxable deed unless the tax is paid at the same time (§11932 and §11933). The money goes to the county and, where a city tax applies, the city. It isn’t a state tax and it isn’t a sales tax.

How much is the transfer tax in California?

There are two layers: the county tax and, depending on where the property is, a city tax.

The county rate: $1.10 per $1,000

A county that adopts the tax charges $0.55 per $500, which works out to $1.10 per $1,000. On a $500,000 sale, the county tax is $550.

A city can add its own tax at half that rate under §11911(b). When it does, the county credits the city tax against its own (§11931). The total stays at $1.10 per $1,000.

City transfer taxes

Charter cities can set their own, much higher rates. In those cities, the city tax is charged on top of the county’s $1.10 per $1,000. Here are some examples:

Rates as published by the Alameda County Clerk-Recorder, the City of Oakland, the City of Berkeley, the Los Angeles County Registrar-Recorder and the City of Los Angeles, checked October 2026. Measure ULA thresholds apply to sales closing after June 30, 2026, and are adjusted each year.

Example: the same sale in three places

Say you buy a $1,000,000 rental property in Alameda County:

• Unincorporated Alameda County: county tax only, $1,100.
• City of Alameda: $1,100 county tax plus $12,000 city tax (1.2%), so $13,100 in total.
• Oakland: $1,100 county tax plus $15,000 city tax at the 1.5% rate for that price range, so $16,100 in total.

Check the county recorder’s website for the property’s exact location before you sign a purchase agreement. City limits matter more than the county name.

Who pays transfer taxes in California: buyer or seller?

State law doesn’t decide who pays. The recorder only needs the tax paid before the deed can be recorded. Who pays is set by the purchase agreement. Local custom varies from county to county, and some cities split the tax differently. Agree on it explicitly when you negotiate, and confirm it on the escrow instructions.

Can you deduct transfer tax on your income tax return?

Not as an expense in the year you pay it. IRS Publication 527 lists transfer taxes among the settlement fees and closing costs that "are part of your basis" in a rental property. How you recover the cost depends on which side of the deal you’re on:

• If you buy a rental property: add the transfer tax to your basis. Basis is split between land and building, and the building portion of residential rental property is depreciated over 27.5 years. So you recover part of the transfer tax each year through depreciation. Any remaining basis reduces your gain when you sell.
• If you sell a property: transfer tax you pay as the seller is a selling expense. Selling expenses reduce the amount realized on the sale, which lowers your taxable gain (Publication 544 has a worked example).
• If it’s your own home: Publication 530 says you can’t deduct transfer taxes. They’re added to the basis of the home instead.

Keep your closing statement with your property records, because you or your accountant will need the transfer tax figure to set your basis or work out your gain. Property accounting software makes it easier to keep those records in one place. For more on what you can and can’t write off when you buy, see rental property closing costs that are tax-deductible and our guide to capital gains tax on rental properties.

What are the transfer tax exemptions in California?

The Documentary Transfer Tax Act lists exemptions in Chapter 3 (§11921 to §11930.5). Common ones include:

• Loans and refinancing. A deed of trust or other document given to secure a debt (§11921).
• Gifts and inheritance. Property passed as a gift during the owner’s lifetime or on someone’s death, whether outright or in trust (§11930).
• Divorce or legal separation. Dividing community property between spouses under a court judgment or a written agreement. The deed must include a signed statement claiming the exemption (§11927).
• Foreclosure. A deed to the lender as a result of, or in lieu of, foreclosure. Tax still applies to any amount paid above the unpaid debt (§11926).
• Bankruptcy reorganization. Transfers that carry out a reorganization plan confirmed under the federal Bankruptcy Code (§11923).
• Some partnership transfers. Certain transfers of interests in a partnership that holds the property, if conditions are met (§11925).

Sales of $100 or less aren’t taxed at all (§11911). Cities with their own transfer tax may apply different exemption rules, so check the city ordinance before you rely on one.

Check local rates before you sign

In most of California, transfer tax is a small closing cost. In cities like Oakland, Berkeley and Los Angeles, it can run to tens of thousands of dollars. Before you sign a purchase agreement:

• Look up the county recorder’s page for the county rate and any city tax at the property’s address.
• Agree in the contract who pays, and check it matches the escrow instructions.
• Keep the settlement statement. It’s what sets your basis for depreciation and your gain when you sell.

This article is general information, not tax or legal advice. Rates were checked in October 2026 and change regularly. Confirm current rates with the county recorder or city, and speak to a tax professional about your situation.

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