In November 2007, City Council approved an amendment to the Realty Transfer Tax section of The Philadelphia Code to allow for two people who provide evidence of financial interdependence to be relieved of the 4-percent tax usually incurred when individuals transfer real estate between each other. Prior to the 2007 City Council ruling, the only couples who could receive the transfer-tax exemption were opposite-sex married couples. However, the City Council decision was not widely publicized, which has led to uncertainty among lending companies, title companies and Philadelphia residents.
This legislation encompasses all financially interdependent individuals, regardless of sexual orientation. The law defines financially interdependent people as those “who live together as a single household and who, for at least six months, have agreed to share the common necessities of life and be responsible for each other’s common welfare.”
Under the law, same-sex couples who have registered as life partners with the city do not need to provide any further documentation to prove their financial interdependence, while those in unregistered same-sex relationships or other types of situations would have to provide evidence of their relationships.
The current transfer-tax form allows applicants to check off boxes signifying which exemption they’re claiming but there is no mention of the FIP exemption, it has to be written-in. Philadelphia’s Department of Revenue has agreed to modify the certification form to reflect that financially interdependent persons could be exempt from the tax.
This should reduce confusion and heighten awareness of the 2007 amendment. But this being Philly, after all, there is no word yet as to when the updated Transfer Tax Certification (pdf) from will become available.