The One Big Cost No VA Benefit Touches
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
A veteran can buy with no down payment, no funding fee and no property tax in Pennsylvania, and still need five figures of cash in Philadelphia. This is why.
The rates
| Where | Rate |
|---|---|
| Commonwealth of Pennsylvania, statewide | 1% |
| ★ City of Philadelphia, on top | 3.578% |
| ★★ Philadelphia total | ★★ 4.578% |
★ Elsewhere in Pennsylvania the Commonwealth's 1% applies and municipalities levy their own local rates on top. We publish no local rate for any other municipality, because we did not read one at a primary source. Your title company has the figure for the address.
The arithmetic, which is all it is
- 4.578% of Philadelphia's typical value of $389,523 is about $17,834.
- At the customary even split, roughly $8,917 each.
- Per $100,000 of price, about $4,578 in Philadelphia and $1,000 in Commonwealth tax alone elsewhere.
★ Those are tax lines only, not a closing-cost estimate, and we publish no payment or rate figures anywhere on this site.
★★ "Custom" is not the same as "liability"
The even split is convention. The Pennsylvania Department of Revenue's position is that "both grantor and grantee are held jointly and severally liable".
★★ Jointly and severally means the Commonwealth may pursue either party for the whole amount. So the allocation in your contract is an agreement between you and the seller about who pays; it is not a shield.
★ Which also makes it a negotiating lever. In a competitive Philadelphia offer, agreeing to carry more of the transfer tax is a concession with a precise price, and it is worth knowing that price before you offer it. We are the lender, not your agent, the negotiation is theirs and yours.
★★ Why none of the veteran benefits help here
| Benefit | Does it touch transfer tax? |
|---|---|
| VA zero down payment | No: it finances the purchase, not the transaction taxes |
| VA funding-fee exemption | No: it waives a VA fee, nothing else |
| ★ PA Disabled Veterans' Real Estate Tax Exemption | ★ No: it exempts recurring real estate tax, not the one-off transfer tax |
★★ That third row is the one to be clear about, because the names are similar and the effect is not. The Commonwealth exempts the annual bill on the home you own. It does not exempt the tax on buying it. What the exemption does cover.
★ So plan for it
- Ask your title company for the jurisdiction-specific figure while under contract, not at the table.
- Decide the split deliberately in the offer.
- Hold the cash. A zero-down loan removes the deposit, not the transaction costs.
★ And if Philadelphia's number is the obstacle, the geography matters: Pittsburgh at $232,121 carries no Philadelphia city rate and a far smaller base. The comparison.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
How much is Philadelphia realty transfer tax?
4.578 percent in total, being the city's 3.578 percent plus the Commonwealth of Pennsylvania's 1 percent. On a typical Philadelphia home value of $389,523 that is about $17,834, or roughly $4,578 per $100,000 of price.Does the Pennsylvania veteran property tax exemption cover transfer tax?
No. The Disabled Veterans' Real Estate Tax Exemption exempts recurring real estate tax on a principal dwelling. It does not exempt the one-off realty transfer tax charged on buying the property.Who pays realty transfer tax in Pennsylvania?
Allocation is a matter for the purchase contract and local custom, and in Philadelphia an even split is conventional. The Pennsylvania Department of Revenue's position is that both grantor and grantee are held jointly and severally liable, so the Commonwealth can pursue either party for the full amount.Does a VA loan pay closing costs like transfer tax?
No. A VA loan can remove the down payment and, for exempt veterans, the funding fee, but it does not pay realty transfer tax. A zero-down purchase in Philadelphia still generally needs cash at closing.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. The Pennsylvania Disabled Veterans' Real Estate Tax Exemption is administered by the Pennsylvania State Veterans' Commission through each county Director of Veterans Affairs, not by Cornerstone; its criteria and income thresholds are set by the Commonwealth and change. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.