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Below are some general information about tax withholding and transfer tax information.

Tax Withholding

When California real estate is old or transferred, 3 1/3 percent of the total sale price must be withheld from the seller and sent to the California Franchise Tax Board (California Revenue and Taxation Code Section 18662). Withholding of 3 1/3 percent is not required if the total sale price is $100,000 or less; the property is being foreclosed upon (sold pursuant to a power of sale under a mortgage or deed of trust, sold pursuant to a decree foreclosure); the transferor is a bank acting as a trustee other than a trustee of a deed of trust; or the seller certifies to an exemption.

Transfer Tax

A transfer tax is essentially a transaction fee (often relatively small in relation to the value of property) imposed on the transfer of title to property. This kind of tax may be imposed where there is a legal requirement for registration of the transfer, such as that of real estate. In California, counties and cities have been authorized to impose a tax on deeds of transfer of realty located within such county or city. The county rate is $0.55 for each $500 of value, and the city rate varies. The transfer tax must be paid by the person who makes, signs, or issues any document subject to the tax, or for whose use or benefit the document is made, signed or issued.