5 Things to Know Before Transferring a Deed in Pennsylvania

Deed transfers are one of the most common transactions we handle at our office — and one of the easiest to get wrong. Whether you are transferring property to a spouse, a child, a trust, or an LLC, Pennsylvania law imposes specific requirements that, if overlooked, can result in unexpected tax bills, title defects, or complications down the road.

Here are five things every Pennsylvania property owner should understand before signing a deed.

1. Not All Deeds Are the Same

Pennsylvania recognizes several types of deeds, and choosing the wrong one can cost you.

A General Warranty Deed provides the most protection — the seller guarantees clear title for the entire chain of ownership. A Special Warranty Deed only covers the seller's period of ownership, which is common for estate and trust transfers. A Quitclaim Deed transfers whatever interest the grantor has with no guarantees at all.

Quitclaim deeds are popular for family transfers because they are simple, but they offer zero protection to the new owner. If a title issue surfaces later, the new owner has no recourse against the grantor. For many family situations, a special warranty deed is the better choice — still straightforward, but with meaningful protection.

2. Transfer Tax May Apply — But Exemptions Exist

Pennsylvania imposes a realty transfer tax on most deed transfers, generally 2% of the property's fair market value (1% state plus 1% local in most counties). That can add up quickly — a $300,000 property means $6,000 in transfer tax.

However, several exemptions exist under 72 P.S. § 8102-C that can eliminate the tax entirely:

• Transfers between spouses are exempt.
• Transfers to a revocable living trust where the grantor is the sole beneficiary during their lifetime are generally exempt.
• Transfers to an LLC where the same persons own 100% of the entity may qualify for exemption — but the rules are strict and the exemption can be lost if ownership changes within three years.
• Transfers from a decedent's estate to beneficiaries named in the will or by intestacy are exempt.

Getting the exemption wrong — or failing to claim it properly on the Statement of Value (Rev-183) — means paying thousands in tax you didn't owe.

3. Transferring to a Child Has Hidden Consequences

Parents frequently want to transfer the family home to a child during their lifetime, often to "avoid probate" or "keep it in the family." While this can work, there are significant considerations most people don't think about:

Transfer tax: Unless an exemption applies, you will owe realty transfer tax on the fair market value.

Gift tax: Transfers for less than fair market value may trigger federal gift tax reporting requirements (though no tax is typically owed due to the lifetime exclusion).

Medicaid lookback: If you need nursing home care within five years of the transfer, Pennsylvania's Medicaid program will treat the transfer as a disqualifying gift, potentially making you ineligible for benefits during a penalty period. This is one of the most common and costly mistakes we see.

Loss of stepped-up basis: When property passes at death, the heir receives a stepped-up cost basis equal to fair market value. When property is gifted during lifetime, the recipient gets the donor's original cost basis — which can mean a much larger capital gains tax bill when the property is eventually sold.

For many families, keeping the property in the parent's name and using a properly drafted will or trust to transfer it at death is actually the better strategy.

4. The Deed Must Be Recorded Properly

A signed deed is not effective against third parties until it is recorded with the county Recorder of Deeds. Recording establishes the public record of ownership and protects the new owner against claims by creditors, subsequent purchasers, or other parties.

In addition to the deed itself, Pennsylvania requires a Statement of Value form (Rev-183) to be filed with every deed transfer. This form declares the consideration paid and any applicable transfer tax exemptions. If the form is not completed correctly, the Recorder of Deeds will reject the recording.

We also prepare and file a Real Estate Tax Certification to ensure that all property taxes are current through the date of transfer.

5. Deed Transfers Should Be Coordinated with Your Estate Plan

A deed transfer does not happen in a vacuum. Moving property into a trust, transferring it to a child, or retitling it in an LLC changes how that property is treated in your estate plan, your tax returns, and potentially your Medicaid eligibility.

Before you transfer a deed, make sure your attorney has reviewed how the transfer fits into the bigger picture — including your will, powers of attorney, beneficiary designations, and any business or tax planning considerations.

At Ament Law Group, our attorneys practice across estate planning, real estate, and business law, so we can see the full picture when advising on a deed transfer. We handle the deed preparation, transfer tax analysis, recording, and coordination with your estate plan — all for a flat fee quoted upfront.

Ready to Transfer a Deed?

Call Ament Law Group at (724) 733-3500 to discuss your situation. We handle deed transfers throughout Westmoreland, Allegheny, and surrounding counties.

About the Author

John W. Ament, Esq.

John W. Ament is a partner and co-founder of Ament Law Group, P.C. in Murrysville, PA. He holds a J.D./M.B.A. from Duquesne University and is a licensed Pennsylvania Title Insurance Agent.