2015 Update: Transfer Taxes in California
Dena M. Cruz
Dena M. Cruz is counsel at Bryan Cave, LLP and a former member of the Executive Committee of the Real Property Section of the State Bar of California. The author would like to thank and acknowledge Scott Rogers of Rutan & Tucker for his work on an earlier transfer tax article published by the Journal in 2005.
California, like nearly all states, requires the payment of a tax on most instruments transferring an interest in real property. The amount of the tax, and the rules and practices regarding such taxes, vary greatly across the state. As a consequence, a clear understanding of the California transfer tax framework is required to avoid unnecessary confusion, delay, and expense in closing California real property transactions. This article will outline the transfer tax system in California, provide a summary of the major exemptions to the tax, and discuss certain common practices relating to the California Documentary Transfer Tax Act.