Documentary Transfer Tax Exemptions in California

Under California Revenue and Taxation Code Section 11902, numerous real estate transactions are exempt from documentary transfer tax. A statement identifying the applicable exemption must appear on the face of any document recorded without payment of the tax. Understanding these exemptions helps agents and clients avoid unnecessary costs.

Common exemptions include: conveyances confirming title already held by the grantee (R&T 11911), conveyances in dissolution of marriage from one spouse to the other (R&T 11927), conveyances to secure a debt such as a deed of trust (R&T 11921), reconveyances upon satisfaction of a debt (R&T 11921), and transfers into or out of a living trust (R&T 11930).

Additional exemptions cover: conveyances changing the manner in which title is held where grantors and grantees remain the same with the same proportionate interests (R&T 11911), court-ordered conveyances not pursuant to sale (R&T 11911), bona fide gifts where the grantor received nothing in return (R&T 11911), conveyances establishing sole and separate property of a spouse (R&T 11911), and conveyances confirming a community property interest purchased with community property funds (R&T 11911).

Less common but important exemptions include: conveyances confirming a change of name (R&T 11911), easement or oil and gas lease conveyances where consideration is less than $100 (R&T 11911), conveyances where liens and encumbrances equal or exceed the property value with no additional consideration (R&T 11911), conveyances from a trustee under a land contract at consummation (R&T 11911), and transfers between entities where grantors and grantees are the same parties holding the same proportionate interests — with an exception for partnership dissolutions (R&T 11923(d) and 11925(b)).

Team Goeglein at Fidelity National Title identifies applicable transfer tax exemptions on every transaction and ensures the correct exemption language is included on recorded documents across the South Bay and Westside LA.