Morgan Hill · Buying & selling

Buying or selling a home in Morgan Hill

Morgan Hill has its own documentary transfer tax, owed by any person who makes, signs or issues the taxed document or for whose benefit it is made. Seller disclosures and property tax follow state law.

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Key points

Transfer tax: Morgan Hill transfer tax: $0.55 per $1,000, only on transfers over $100, not counting liens that remain.
Seller disclosures: State law: sellers of single-family homes must give buyers a Transfer Disclosure Statement, with exemptions such as foreclosure and court-ordered sales.
Property tax: State law: general property tax is at most 1% of full cash value plus voter-approved debt; the base value rises at most 2% a year.

Each rule below is marked Morgan Hill code or CA state law and links to the section it comes from (checked October 2026). General information, not legal advice.

Transfer tax

Morgan Hill code What Morgan Hill's code adds
City transfer tax	Yes. The city taxes each deed or document that transfers real property sold in the city. § 3.16.030 · code text There is imposed on each deed, instrument or writing by which any lands, tenements or other realty sold within the city shall be granted, assigned, transferred or otherwise conveyed
Rate	27.5 cents for each $500 of value, or part of $500. Applies: Applies when the price or value conveyed is more than $100. § 3.16.030 · code text a tax at the rate of twenty-seven and one-half cents for each five hundred dollars or fractional part thereof.
Rate per $1,000	$0.55 per $1,000 of value. Applies: Applies when the price or value conveyed is more than $100. § 3.16.030 · code text a tax at the rate of twenty-seven and one-half cents for each five hundred dollars or fractional part thereof.
Price threshold	The tax applies only when the price or value is more than $100. Applies: Value of the interest or property conveyed, not counting liens or debts remaining at the time of sale. § 3.16.030 · code text when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrances remaining thereon at the time of sale) exceeds one hundred dollars
Who pays	Any person who makes, signs or issues the taxed document, or for whose use or benefit it is made. § 3.16.040 · code text Any tax imposed pursuant to Section 3.16.030 of this chapter shall be paid by any person who makes, signs or issues any document or instrument subject to the tax, or for whose use or benefit the same is made, signed or issued.

CA state law Underneath, California law still applies. County documentary transfer tax: A county may tax a sale over $100 at $0.55 for each $500 of value ($1.10 per $1,000), not counting liens that remain on the property (Rev. & Tax. Code § 11911(a)). City share of the tax: A city may impose half the county rate ($0.55 per $1,000); the county then credits the city tax against its own, so the combined standard rate stays $1.10 per $1,000 (Rev. & Tax. Code § 11931). California rules for buying and selling — the full state rule →

Seller disclosures

CA state law California law sets this statewide. Transfer Disclosure Statement (TDS) — who must give it: Sellers of single-family residential property must give the buyer a Real Estate Transfer Disclosure Statement (sale, exchange, installment contract, lease-option or ground lease with improvements) (Civ. Code §§ 1102(a), 1102.2). Natural Hazard Disclosure Statement (NHD): Sellers must disclose if the property is in a special flood hazard area, dam inundation area, very high fire hazard severity zone, earthquake fault zone, seismic hazard zone, or wildland fire area (Civ. Code § 1103(c)). California seller disclosure rules — the full state rule →

Property tax after you buy

CA state law California law sets this statewide. 1% property tax limit (Prop 13): The general property tax on real property may not exceed 1% of its full cash value; voter-approved bond debt is levied on top (Cal. Const. art. XIII A, § 1(a), (b)). 2% annual cap on assessed value: The base year value rises each year by the California CPI change, but never more than 2% (Rev. & Tax. Code § 51(a)(1)(D)). California property tax rules — the full state rule →

Sewer lateral inspection

Morgan Hill code What Morgan Hill's code adds
How long a certificate lasts	The compliance certificate must have been issued within the past 10 years. Applies: Opening a new water service after a property sale. § 13.20.070 · code text Opening a new water service following the sale of a property will require a compliance certificate for private sewer lateral issued within the past ten years
Deadline to comply	Within 180 calendar days after the sale date. Applies: When the buyer takes over repair responsibility through a valid transfer agreement. § 13.20.070 · code text The buyer must then complete the repairs to meet the city's standards no later than one hundred eighty calendar days after the date of the sale.
Fee or permit	A compliance certificate is required. Applies: Before the sale of the property closes. § 13.20.070 · code text The seller, prior to the sale of property, shall be responsible for complying with the requirements of this chapter and for obtaining a compliance certificate for private sewer lateral before the conclusion of the sale of property The compliance certificate is issued within 5 business days after compliance is submitted and verified. Applies: Once compliance with the chapter is submitted to the city and verified. § 13.20.070 · code text Once compliance with the requirements of this chapter has been submitted to the city and verified, a compliance certificate for private sewer lateral will be issued within five business days.
When an inspection is required	Inspection and any repairs must be done before the property is sold. Applies: Sale of residential, commercial or industrial property. § 13.20.070 · code text All residential, commercial, and industrial buildings shall have the private sewer lateral inspected by a qualified contractor for any defects and any repairs needed shall be completed prior to the sale of property to meet the city's standards The lateral must be inspected before a new building connects to it. Applies: A new building connecting to an existing private sewer lateral. § 13.20.070 · code text Before any new building is connected to an existing private sewer lateral, the property owner must have the private sewer lateral inspected by qualified contractor for any defects No inspection needed. Applies: When the lateral was built or fully replaced 15 years or less before the sale date. § 13.20.070 · code text The private sewer lateral was constructed or completely replaced fifteen years or less prior to the property sale date. No inspection needed. Applies: When the lateral was inspected and met city standards less than 10 years before the sale date. § 13.20.070 · code text The private sewer lateral was inspected and met city standards less than ten years prior to the property sale date. No inspection needed. Applies: A single-family unit connected to a private sanitary sewer collection system covered by a separate city rule. § 13.20.070 · code text The property is a single-family unit connected to a private sanitary sewer collection system subject to Section 13.20.073.
Owner's responsibility	The property owner owns the private sewer lateral; it is not part of the public sewer. § 13.20.070 · code text The private sewer laterals are the property of the property owner and are not part of the public sewer system. The owner must inspect, maintain, repair and replace the private sewer lateral at their own expense. § 13.20.070 · code text Each property owner shall, at the property owner's expense, inspect, maintain in good working order, repair and replace, as necessary, the private sewer lateral The buyer takes on the needed repairs. Applies: When seller and buyer agree before the sale to shift repair duty to the buyer. § 13.20.070 · code text In the event the buyer agrees to assume responsibility for repairing the private sewer lateral, the seller shall provide proof of inspection of the private sewer lateral to the buyer which indicates the repairs needed to meet the city's standards.

Who this affects

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Frequently asked questions

What is the transfer tax when you sell a home in Morgan Hill?

Morgan Hill transfer tax: $0.55 per $1,000, only on transfers over $100, not counting liens that remain.

Does Morgan Hill require a sewer lateral inspection when you sell a home?

Morgan Hill's code: The compliance certificate must have been issued within the past 10 years. (Opening a new water service after a property sale.) (§ 13.20.070); Within 180 calendar days after the sale date. (When the buyer takes over repair responsibility through a valid transfer agreement.) (§ 13.20.070).

General information, not legal advice.

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