Documentary Transfer Tax

The staff of the Recorder's Office are forbidden by California legal codes to practice law or provide legal advice; this prohibition includes giving advice about what forms you might need or how you should fill them out.

• A tax collected when an interest in real property is conveyed
• Collected by the County Recorder at the time of recording.
• A Transfer Tax Declaration must appear on each deed
• There is a County tax and in some cases, a City tax.
• Assumed financing is exempted from the tax in some jurisdictions;
• There are several reasons for exemption from the tax. A valid legal reason for exemption must be stated on the face of the document.

The Documentary Transfer Tax (DTT) imposes a tax on each deed, instrument, or writing by which any lands, tenements, or any other realty sold, shall be granted, transferred, or otherwise conveyed to another person.

• The State Revenue and Taxation Code 11902 - 11934 governs this tax.
• The abstracted text of these sections can be found in the County Recorder's Legal Manual.
• The Federal Regulations were adopted by Sonoma County Ordinance No. 1058 and became effective 1/1/68.
• The tax code directs the Recorder to rely upon the tax declaration unless she/he has reason to believe otherwise.

The signature of the declarant, the statement of how tax is computed, and the name of the city or "unincorporated" must be shown in the statement.

The Declaration must be incorporated into the text of the document and signed with the signature of the grantor.

Example:

THE UNDERSIGNED GRANTOR DECLARES:

DOCUMENTARY TRANSFER TAX $ ______ CO. $ ________ CY.

___ COMPUTED ON FULL VALUE OF PROPERTY CONVEYED, OR

___ COMPUTED ON FULL VALUE LESS LIENS REMAINING AT TIME OF SALE

CITY OF __________ UNINCORPORATED___ 

[Revenue & Taxation Code 11911]

* Minus any loans assumed in the sale.
** Santa Rosa and Petaluma City transfer tax is collected in addition to County transfer tax.
** No exemption for assumed loans.

The following are examples of the some of the most common conveyances that are exempt from Sonoma County Documentary Transfer Tax Ordinance No. 1058, Section 12-23. A claimed exemption must be stated on the document. Recorder staff cannot provide legal advice on DTT Exemptions.

1. Gift Deed - A gift of unencumbered property where the grantee does not assume any debt or obligation is exempt from tax. Revenue and Taxation Code Section 11930
2. Confirms Title in Grantees Name - A deed given to remove a cloud on title where the grantor has no interest in the property, such as one spouse deeding to the other to remove any possible community property interest, or a deed to remove an expired option to purchase, is exempt from tax. Revenue and Taxation Code Section 11911
3. Certain Trust Transfers - A deed that transfers the grantor's interest to or from a revocable trust, when the trust is for the benefit of the grantor, is exempt from the tax. Revenue and Taxation Code Section 11930
4. Changes Manner in Which Title is Held - This only applies to conveyance where the grantors and grantees are the same and their percentage of interest does not change. A deed changing joint tenants to community property is the most common example of this exemption. Revenue and Taxation Code Section 11911
5. Certain Court Ordered Conveyances - If a court orders that property be conveyed for no consideration the conveyance is exempt from tax. A court ordered deed to partition property between multiple owners is an example. Revenue and Taxation Code Section 11911
6. Confirms Name Change - This applies to a change in the name of the entity holding title, not a change in the entity. A name change upon marriage or a corporate name change are examples of this exemption. Revenue and Taxation Code Section 11911
7. Agent Acting for Principal - A deed wherein the grantor is acting as an agent for the grantee and is acting solely in his/her capacity as an agent is exempt for the tax. Revenue and Taxation Code Section 11911
8. Certain Leases and Assignments of Lease - A lease or assignment of lease with a term, plus any options for renewal, of less than 35 years is exempt from tax. Revenue and Taxation Code Section 11911
9. A change in the method of holding title to the realty and in which proportional ownership interests in the realty, whether represented by stock, membership interest, partnership interest, cotenancy interest, or otherwise remain the same immediately after the transfer. Revenue and Taxation Code Section 11925
10. A transfer between spouses that allocates property assets under a judgment of dissolution of marriage or an agreement in contemplation of such judgment or order. Revenue and Taxation Code Section 11927
11. Deed to a Public Entity. Any deed to a political subdivision of the United States is exempt from transfer tax. Revenue and Taxation Code Section 11922