Buying or selling in Berkeley and trying to pin down the transfer tax? You are not alone. This is one of the most asked-about closing costs in the East Bay, and the answers can feel confusing. In this guide, you will learn what the Berkeley and Alameda County transfer taxes are, who typically pays, how to estimate the amount for your price point, and how to use exemptions or negotiation to your advantage. Let’s dive in.
What the transfer tax covers
A real property transfer tax is a charge on the conveyance of real estate. It is based on the price or other consideration stated on the deed and is collected when the deed is recorded. In most cases, it shows up on your closing statement as a line item paid through escrow.
In Berkeley, you should plan for two layers of potential tax: a county documentary transfer tax and a separate city real property transfer tax. Both are based on the sale price unless a specific exemption applies.
Two taxes in Berkeley
Berkeley transactions may trigger both of the following:
- Alameda County documentary transfer tax. This is a county-level tax collected at recording by the county recorder.
- City of Berkeley real property transfer tax. This is a municipal tax authorized by the Berkeley Municipal Code. Depending on local procedures, it may be collected at recording or remitted through the city’s finance office.
Each tax has its own rate structure and rules. Your escrow or title officer will calculate and collect the correct amounts at closing, but it helps to understand how they fit together.
Who pays at closing
There are two concepts to keep straight: legal liability and market custom.
- Legal liability is defined by the county and city rules. It specifies who is responsible for the tax.
- Market custom is what typically happens in a given area. In many California markets, sellers often cover transfer taxes, but this is not a fixed rule.
In practice, who pays is negotiable and should be clearly stated in the purchase agreement. Escrow will follow the contract. If you want a specific split or credit, put it in writing upfront.
How to calculate your transfer tax
Transfer taxes are calculated from the sale price using rates set by the county and the city. Rates are published as a percentage or as a dollar amount per 1,000 dollars of consideration. The county and the city can use different formats at the same time.
Quick formulas
Use these simple formulas with the current published rates:
- County tax = (Sale Price ÷ 1,000) × County Rate per $1,000
- City tax = Sale Price × City Rate (if expressed as a percent) or (Sale Price ÷ 1,000) × City Rate per $1,000
- Total transfer tax = County tax + City tax
Add recording fees and title or escrow charges for a complete closing cost picture.
Sample calculation template
Here is a template you can plug numbers into after you confirm the current rates with your escrow officer:
- Example sale price: $1,200,000
- County rate per $1,000: $X
- City rate per $1,000 or percent: $Z or Y%
Steps:
- County tax: (1,200,000 ÷ 1,000) × $X = $[County Tax]
- City tax: If percent, 1,200,000 × Y% = $[City Tax]; if per $1,000, (1,200,000 ÷ 1,000) × $Z = $[City Tax]
- Total transfer tax: $[County Tax] + $[City Tax]
Label any example you share with your lender or CPA as an estimate and confirm with escrow before closing.
Exemptions and how to claim
Not every transfer is taxable. Some types of transfers may be exempt or partially exempt. Exemptions are specific and usually require documentation.
Common exemption categories
While you must verify for your situation, typical categories include:
- Transfers between spouses or registered domestic partners
- Certain parent and child transfers
- Transfers into or out of a revocable living trust with no change in beneficial ownership
- Transfers incident to divorce or legal separation
- Some probate or trust administration conveyances by fiduciaries
- Foreclosure-related transfers or deeds in lieu
- Transfers to government entities or qualifying nonprofits
- Transfers where no consideration is paid, such as gifts
Filing and timing
Exemptions are not automatic. Most require an affidavit or claim form submitted with the deed at recording or filed with the city. If you do not claim the exemption at recording, tax may be assessed and you may need to appeal later. Ask escrow for the right forms well before closing so there are no delays.
Verification steps before you sign
Rates and procedures can change. Before you finalize numbers, take these steps:
- Get the current City of Berkeley real property transfer tax schedule or ordinance page and the applicable exemption forms.
- Confirm the Alameda County documentary transfer tax rate and fee schedule published by the county recorder.
- Ask your escrow or title officer to verify whether the city tax is collected at recording or remitted directly to the city.
- Confirm who pays the tax in your purchase agreement and how any credits will appear on the settlement statement.
- Use the full consideration on the deed as your tax base unless an exemption applies, and confirm what counts as consideration for your transaction.
Negotiation tips for buyers and sellers
A clear agreement on transfer taxes keeps deals calm and predictable. Here is how to approach it.
Seller strategies
- Price with taxes in mind. If local custom or your contract has you paying, model your net proceeds with the full transfer tax included.
- Offer structure. In a strong market, you can ask the buyer to cover transfer taxes in exchange for other terms they value.
- Exemption readiness. If you qualify for an exemption, have documents organized early to keep your timeline on track.
Buyer strategies
- Ask for a credit. If the seller will not pay the transfer tax, request a closing credit or a price reduction to offset the amount.
- Lender rules. Check with your lender about how seller credits are treated and confirm that escrow will show them correctly on the Closing Disclosure.
- Upfront estimate. Ask escrow for a written estimate of county and city transfer taxes to avoid surprises.
Contract clarity
- Put it in writing. Use the tax and fee allocation clauses in the contract to state who pays which transfer taxes.
- Include adjustments. If an exemption is granted after recording or a rate changes, specify how refunds or shortages will be handled.
Closing checklist for escrow and title
Bring this quick list to your next escrow call:
- Written estimate of county and city transfer taxes for your sale price
- Confirmation of current rates and whether the city tax is collected at recording
- List of any exemption claim forms and filing instructions
- All recording fees and transfer tax line items expected on your settlement statement
- Any local surcharges or temporary measures that could affect closing costs
Prop 19 vs transfer tax
Proposition 19 affects property tax matters such as assessed value transfers and some parent and child reassessment rules. It does not eliminate or change real property transfer taxes. Treat reassessment exclusions and transfer tax exemptions as separate processes with their own applications and timelines.
We can help you plan your costs
Transfer taxes can shift thousands of dollars between parties. A clear plan, verified rates, and the right contract language go a long way toward a smooth closing. If you want a precise estimate for your price point and strategy guidance on who pays what, connect with the Jodi Nishimura Group. We will coordinate with escrow, confirm current rates, and help you negotiate terms that fit your goals.
FAQs
Who pays the transfer tax in Berkeley?
- Legal liability is defined by county and city rules, but who actually pays at closing is a negotiable contract term; confirm the allocation in your purchase agreement and with escrow.
Are family transfers exempt from Berkeley transfer tax?
- Many family-related transfers, such as between spouses or some parent and child transfers, may qualify if you submit the required claim forms; verify eligibility and file at recording.
Does Proposition 19 change transfer tax in Berkeley?
- No. Prop 19 deals with property tax assessments and base transfers; it does not provide a transfer tax exemption or change documentary transfer tax requirements.
How does transfer tax affect a seller’s net?
- Transfer taxes are a closing cost that reduce seller net proceeds unless the buyer agrees by contract to cover them or to provide an offsetting credit.
When is transfer tax collected in a sale?
- Transfer taxes are typically collected through escrow at the time the deed is recorded; the county recorder handles the county tax and city procedures govern the municipal tax.
