Pennsylvania’s realty transfer tax is imposed on almost all recorded transfers of title to real estate within the Commonwealth. Creative real estate lawyers and tax planners have long tried to avoid the tax by transferring ownership interests in entities holding title to real estate, rather than conveying title to the property itself by deed. So, for example, the members of a limited liability company or partners in a partnership would sell their interests in the company or partnership and the buyer would thus get control of the property through ownership of the company or partnership. Since the late 1980’s, Pennsylvania limited the tax free nature of these transactions to only those where less than 90% of a company was sold within a three year period. This gave rise to the so-called 89/11 transaction in which a buyer would acquire 89% of a company holding real estate, and defer for three years acquiring the remaining 11%. These types of transactions have been criticized by politicians and government officials as an unfair loophole, allowing buyers and sellers of significant commercial real estate buildings to escape a tax that otherwise impacts almost every other conveyance of property in Pennsylvania such as single family homes. As part of recently adopted amendments to Pennsylvania’s Tax Reform Code, however, after January 1, 2013, 89/11 transactions will almost entirely, be a thing of the past. In the legislation, which Governor Corbett signed earlier this month, 89/11 transactions will be fully taxable if there is a legally binding commitment to execute a transfer of the remaining 11% at a later date, the terms of the transfer are fixed and not subject to negotiation and the transferring party receives full consideration for the transfer. The new statutory language suggests that options to acquire the final 11% of a real estate company, where the option price is “subject to negotiation” might escape realty transfer tax, but the practical business considerations that would make such a transaction unpalatable to most buyers and sellers likely mean that after the end of 2012, 89/11 transactions will be a thing of the past.