Selling in Culver City in the next few months? One closing cost you can plan for now is the documentary transfer tax. It is predictable, it shows up as a clear line on your settlement statement, and it affects your net proceeds. In this guide, you will learn how the tax is calculated, who typically pays it, what exemptions may apply, and how to build it into your net sheet so there are no surprises at closing. Let’s dive in.
Transfer tax basics in Culver City
Documentary transfer tax applies when you transfer real property and record the deed. In Culver City, you look at two layers: the Los Angeles County tax and a possible Culver City municipal tax. You calculate each layer separately, then add them to see your total.
County documentary transfer tax
The county tax applies to most sales recorded in Los Angeles County. The current standard rate is $1.10 per $1,000 of the sales price. Escrow collects it and remits payment at recording.
- County tax formula: (Sales price ÷ 1,000) × $1.10
Culver City municipal transfer tax
Many cities add a municipal transfer tax on top of the county rate. Culver City sets its own rate, which may be a flat amount per $1,000 or use a tiered structure. Because municipal rates can change, verify the current Culver City rate with the city or your escrow officer before you finalize your net sheet.
- City tax formula: (Sales price ÷ 1,000) × Culver City rate
Quick example with a placeholder city rate
Assume an $800,000 sale:
- County tax: (800,000 ÷ 1,000) × $1.10 = $880
- City tax: (800,000 ÷ 1,000) × Rcity = 800 × Rcity
- Total documentary transfer taxes = $880 + (800 × Rcity)
Replace Rcity with the verified Culver City rate to get your exact amount.
Who typically pays in our area
In California, payment of transfer taxes is not set by state law. The purchase agreement determines who pays, and customs vary by city. In the Culver City area, sellers commonly pay the documentary transfer taxes, especially the county tax, but it is negotiable.
- If a municipal tax applies, parties often follow local custom and allocate it to the seller.
- Buyers and sellers can agree to split or reassign the tax in the contract.
- Escrow will follow the purchase agreement and escrow instructions when collecting and remitting payment.
Confirm the allocation during negotiations so your net sheet reflects the correct payer.
How it affects your net proceeds
Transfer tax is one of several closing costs that reduce your proceeds at closing. You can plan for it early so the final number aligns with your goals.
- High-level net formula:
- Seller net proceeds = Sales price – commission – transfer taxes (county + city, if you pay) – escrow and recording fees – title fees – prorated property taxes or HOA dues – loan and lien payoffs – agreed credits and repairs
What to include on your net sheet
Ask for a draft net sheet that lists each cost as a separate line item:
- Sales price and any buyer credits
- Real estate commission
- County documentary transfer tax (LA County at $1.10 per $1,000)
- Culver City transfer tax at the verified city rate
- Escrow and recording fees
- Title policy and related title charges
- Prorated property taxes, HOA fees, and demand or transfer fees, if any
- Mortgage and lien payoffs
- Staging, repairs, home warranty, and other seller-paid items
- Estimated income tax considerations after closing, if relevant to you
Worked example for a $1,000,000 sale
Below is an illustration using a placeholder city rate. Update the city line when you confirm the current Culver City number.
- Sales price: $1,000,000
- Commission: 5% total = $50,000
- County transfer tax: (1,000,000 ÷ 1,000) × $1.10 = $1,100
- Culver City transfer tax: (1,000,000 ÷ 1,000) × Rcity = 1,000 × Rcity
- Escrow and recording fees: $1,200
- Mortgage payoff: $400,000
- Prorations and HOA: $2,000
Net proceeds before income taxes = $1,000,000 – 50,000 – 1,100 – (1,000 × Rcity) – 1,200 – 400,000 – 2,000 = $545,700 – (1,000 × Rcity)
How to read it:
- If Rcity = $0.50 per $1,000, city tax = $500 and net = $545,200.
- If Rcity = $2.00 per $1,000, city tax = $2,000 and net = $543,700.
Small changes in the city rate can move your bottom line by thousands of dollars. That is why it should be verified early and updated before you sign.
Exemptions and special cases
Certain transfers may be partially or fully exempt from documentary transfer tax. Rules and documentation requirements can vary between the county and the city, so plan ahead.
Common situations to discuss with your escrow officer and the city:
- Transfers between spouses or registered domestic partners
- Transfers incident to divorce or legal separation
- Transfers to or from qualifying governmental entities or certain non-profits
- Transfers with no consideration, such as a gift, or with nominal consideration
- Deed corrections, foreclosure-related transfers, or deed in lieu situations
Documentation matters. Many exemptions require specific deed language, sworn statements, and city or county forms. Provide supporting documents to escrow early to prevent recording delays or unexpected tax liability.
When and how payment happens
Documentary transfer taxes are collected at closing and paid when the deed is recorded. Your escrow or settlement agent will:
- Calculate the county and city amounts based on the contract and verified rates
- Collect the funds from the correct party according to the purchase agreement
- Prepare the deed and any required forms for exemptions
- Remit payment to Los Angeles County and, if applicable, to Culver City at recording
You will see the charges on your Closing Disclosure or settlement statement. Review those figures and the payees before you sign.
Step-by-step plan for Culver City sellers
Follow this simple checklist to stay ahead of the transfer tax and your net proceeds.
Three to twelve months before listing
- Request a professional CMA or appraisal to set a realistic price range.
- Ask for a preliminary seller net sheet that shows county and Culver City transfer taxes as separate lines.
- Have your escrow or title team draft a HUD-style or Closing Disclosure worksheet.
- Verify the current Culver City transfer tax rate and any exemption requirements with the city or through escrow.
- If you may qualify for an exemption, gather the required deed language and affidavits now.
During negotiations
- Spell out who pays each documentary transfer tax in the purchase agreement.
- If the buyer agrees to cover a portion or all of the city tax, make the language clear.
- Update your net sheet after every major negotiation change.
During escrow and at closing
- Review the Closing Disclosure for transfer tax amounts and allocation.
- Confirm that escrow will remit county and city taxes to the correct authorities.
- Provide any exemption documents early so recording is not delayed.
After closing
- Talk with your CPA about the tax treatment of closing costs, capital gains, and any potential 1031 exchange planning if relevant to your situation.
Common mistakes to avoid
- Assuming there is no city tax. Always verify the current Culver City rate.
- Waiting until escrow to confirm who pays. Decide in the offer stage and put it in writing.
- Skipping a detailed net sheet. You need both county and city taxes listed as separate lines.
- Overlooking exemptions. If you may qualify, line up the documentation before the deed is prepared.
- Not checking the final Closing Disclosure. Confirm the math and who is paying before signing.
What to do next
The transfer tax is predictable once you confirm the city rate and decide who pays. Build it into your pricing and negotiation plan, then keep your net sheet current through closing. If you want a private, seller-first strategy that balances market presentation with clear numbers, we can help you price, plan, and coordinate every step.
Request Your Private Home Valuation with Laura Brau.
FAQs
How are Culver City transfer taxes calculated?
- You add the Los Angeles County tax of $1.10 per $1,000 to any Culver City municipal tax, each computed as (sales price ÷ 1,000) × the applicable rate.
Who usually pays the transfer tax in Culver City home sales?
- Sellers commonly pay by local custom, but payment is negotiable and must be assigned in the purchase agreement and escrow instructions.
When is the transfer tax paid during a sale?
- Escrow collects the funds and remits payment at recording, and the amounts appear on your Closing Disclosure or settlement statement.
Are there exemptions to the transfer tax for Culver City properties?
- Possible exemptions include transfers between spouses or domestic partners, transfers incident to divorce, some government or non-profit transfers, and certain no-consideration deeds with proper documentation.
How can I get an exact dollar figure for my sale?
- Ask your agent to obtain a detailed seller net sheet from the title or escrow company and verify the current Culver City rate before you sign.
