Costs of Selling Land in California

Selling Costs in California: What to Know

California counties charge a documentary transfer tax of $0.55 for each $500 of value, which is $1.10 per $1,000. A few cities, such as Los Angeles and Santa Monica, charge their own tax on top. Sellers also pay escrow and title costs set by the contract, their share of property taxes, and state and federal tax on any gain.

This page lists each cost, who usually pays it, and where the number comes from. A worked example shows a $25,000 land sale. If you want to skip most of these costs, you can get a cash offer for your California land.

California documentary transfer tax

Under Revenue and Taxation Code sections 11911 to 11933, the county tax is $0.55 for each $500 of value, or fraction of $500. It applies when the value, not counting liens that stay on the land, is more than $100. The Los Angeles County Recorder lists the rate and the statute.

The tax is paid when the deed is recorded. The deed must show the amount of tax and whether the land is in a city or in the unincorporated county.

City transfer taxes on top of the county tax

Some cities charge their own transfer tax. In Los Angeles County, five cities have special rates: Culver City, Los Angeles, Pomona, Redondo Beach and Santa Monica. For those cities, the county still charges its full $1.10 per $1,000 and the city tax is added. The City of Los Angeles charges $2.25 per $500, plus a higher tax on sales above $5,300,000, per the county recorder.

Other cities, mostly charter cities such as San Francisco and Oakland, set their own rates too. Rates change, so check with the county recorder for the county where your land sits. Most rural land is outside city limits and pays only the county tax.

Who pays what by custom

State law does not fix who pays the transfer tax. The Stanislaus County Clerk-Recorder says either the buyer or the seller pays it, by mutual agreement. In many parts of the state the seller pays the county tax, but local custom varies. Your purchase contract decides it.

Escrow fees, title insurance and recording fees are also split by the contract. The seller pays to clear their own liens and any unpaid property taxes, because the buyer needs clear title.

Escrow, title company or attorney

Most California sales close through an escrow company or the escrow arm of a title company. The escrow holder collects the money, records the deed, pays the transfer tax and pays off liens and back taxes. An attorney is not part of a normal California closing, but you can hire one.

Escrow fees and title insurance premiums vary by company. Ask for a written quote before you sign. County recording fees are set by each county; check your county recorder's fee list.

California real estate withholding

California can require the escrow holder to withhold 3 1/3% of the sale price and send it to the Franchise Tax Board as a prepayment of your income tax. Withholding is not required when the sale price is $100,000 or less, or when you certify an exemption on Form 593. See the Form 593 instructions.

Withholding is not an extra tax. It counts toward your California income tax when you file.

Prorated property taxes

Property taxes are split at closing so each side pays for the part of the year they owned the land. Your settlement statement shows the credit or charge. Any back taxes are paid from the sale proceeds at closing.

California property taxes are billed by the county tax collector. Ask escrow to show how the current year's bill is split on your closing statement.

Capital gains tax basics (federal and California)

You owe tax on the gain, not on the full price. The gain is the sale price minus your basis (what you paid plus improvements) and minus your selling costs. The IRS explains basis in Topic 703.

If you owned the land for more than one year, the federal gain is long-term and is taxed at 0%, 15% or 20%, based on your taxable income. For 2025, a single filer pays 0% on long-term gains when taxable income is $48,350 or less. Land held one year or less is taxed as regular income. See IRS Topic 409.

California taxes capital gains as regular income. There is no lower rate for long-term gains, as the FTB Schedule CA instructions say. For 2025, rates run from 1% to 12.3%, per the FTB tax rate schedules. Taxable income above $1,000,000 also owes the 1% Behavioral Health Services Tax, per the Form 540 booklet.

The closing agent usually reports the sale to the IRS on Form 1099-S. This page is general information, not legal or tax advice. Confirm the numbers with your closing agent or a tax professional.

How selling to a cash buyer changes the costs

A listing with an agent adds a commission on top of the costs above. When you sell to EasyLotBuyer, there are no fees or commissions, and we pay the closing costs. You get a cash offer within 24 hours and can close in as few as 7 days.

We also buy land with back taxes, liens, title issues or no road access, and land held by heirs or an estate. Back taxes are paid at closing from the sale, so you do not need cash up front. Your capital gains tax is still your own, so keep your closing statement for your tax return.

• No agent commission
• No closing costs for you: we pay them
• Back taxes paid at closing from the sale
• Cash offer within 24 hours