By Eric Berman, REALTOR® | The Eric Berman Team at Compass
TL;DR:
Philadelphia is genuinely less expensive than Long Island on housing, and the property tax difference is real. What most comparisons leave out is the Philadelphia city wage tax — a tax on earned income that applies to city residents and, at a lower rate, to non-residents working in the city. Depending on household income, it can consume a meaningful share of what the housing savings deliver, and it's the main reason many relocating households end up in the Pennsylvania suburbs rather than the city itself. The other adjustment: Pennsylvania is not an attorney state. Closings there are typically handled by title companies, which is unfamiliar territory for anyone who has only transacted in New York.
Start With the Long Island Sale
Most people plan this move from the Philadelphia end. The order should run the other way, because the Long Island sale sets the budget, the timeline, and whether the household moves on its own schedule.
Before touring anything in Philadelphia, a seller should know what the current home realistically nets. That model needs the full picture — commission, New York State Transfer Tax at four dollars per thousand, attorney fees generally $1,500 to $3,500, preparation spending, and carrying costs for a listing period longer than hoped. The full breakdown of what a Long Island sale costs covers each line.
One item specific to interstate moves: a seller who establishes Pennsylvania residency before the Long Island closing becomes a New York nonresident for that transaction, which triggers Form IT-2663 — an estimated payment at closing of 8.82 percent of net gain. Not an additional tax, but a prepayment against actual New York liability, refundable where the real number comes in lower. It reduces the wire, which catches people who have already committed those funds to a Philadelphia purchase.
The Wage Tax Changes the Math
Housing is meaningfully cheaper in the Philadelphia area than on Long Island. That part of the comparison holds. What it usually leaves out is the piece that can absorb a large share of the savings.
Philadelphia levies a wage tax on earned income. City residents pay it on all wages regardless of where they work. Non-residents who work within city limits pay it at a somewhat lower rate on income earned there. There is no equivalent for a Nassau County resident working on Long Island — New York State income tax applies, but no county or town wage tax layers on top.
For a household earning well into six figures, this is not a rounding error. It is a recurring annual cost that runs alongside the property tax savings rather than being offset by them, and it applies to income rather than to property value. Rates are set locally and change, so current figures should come from a Pennsylvania accountant rather than from any article.
The practical consequence shapes where relocating households actually land. Living in a Pennsylvania suburb outside city limits, while working outside the city, avoids the tax entirely. Living in the city means paying it. Living in a suburb while commuting into Philadelphia means paying the non-resident rate. That decision is worth modeling with real numbers before choosing a neighborhood, because it can exceed the difference in housing costs between city and suburb.
On property taxes, the picture varies by municipality the same way it does in New York — Philadelphia proper, the Main Line townships, and Bucks or Montgomery County communities differ substantially. The comparison worth making is between the actual current tax bill on the Long Island property and the actual bill on a specific Pennsylvania property, not between averages.
Buying in Pennsylvania Works Differently
This is the section most Long Island sellers need and the one most relocation content skips.
Pennsylvania is not an attorney state. In New York, contract drafting and negotiation are legal work reserved to licensed attorneys, and the attorney coordinates the title search and payoff and runs the closing. In Pennsylvania, residential transactions are typically handled through title companies, using standardized forms, without an attorney necessarily involved on either side.
For someone who has only bought and sold in New York, this feels wrong. It isn't — it's how most of the country operates. But it means the person answering questions during the transaction is not a lawyer, and a buyer who wants legal review of the agreement has to retain counsel themselves and pay for it separately. Many relocating New Yorkers do exactly that, and it's worth deciding in advance rather than partway through. The fuller picture of what the attorney handles on the New York side describes what you'd be giving up.
Transaction costs differ as well. Pennsylvania imposes a realty transfer tax at the state level plus a local component, and in Philadelphia the local portion pushes the combined rate substantially above what New York charges. It's customarily split between buyer and seller, though that's negotiable. Current rates should be confirmed with a Pennsylvania agent or title company for the specific municipality.
Housing stock is genuinely different too. The city runs to rowhouses and converted historic properties; the suburbs to colonials, split-levels, and older estate homes. Inspection expectations differ accordingly — a nineteenth-century rowhouse and a 1960s Nassau colonial present very different inspection reports.
Distance, Commuting, and Getting There
The drive runs roughly 100 to 120 miles depending on where on Long Island you start, generally via the Verrazzano or through Staten Island to the New Jersey Turnpike. It's a real interstate move rather than a regional one, and interstate movers should be booked well ahead, particularly for summer.
On commuting: this move does not work for someone keeping a Manhattan job. Amtrak and NJ Transit connections exist, and a small number of people do it, but daily is impractical. Realistically this is a move for people changing employers, working remotely, or taking a Philadelphia-area position.
Within the region, SEPTA runs regional rail, subway, buses, and trolleys, with regional rail serving the Main Line and the surrounding counties in a role roughly comparable to the LIRR's. Philadelphia International Airport sits closer to the city than JFK or LaGuardia do to most of Nassau, which is a genuine practical improvement for anyone who travels.
City or Suburbs
This is the decision that most shapes the move, and it turns on measurable things rather than on character.
The city offers walkability, the shortest commutes to Center City employment, and lower housing costs per square foot — against the wage tax on residents, generally smaller lots or none, and a different housing stock than most Long Island households are used to.
The Pennsylvania suburbs offer detached housing on lots more comparable to Nassau, SEPTA regional rail access, and no city wage tax for residents who also work outside the city — against higher housing costs than the city and, in some townships, property taxes that narrow the gap with Long Island.
Southern New Jersey across the Delaware is a third option some households consider, with its own tax structure entirely and its own commute profile.
The honest sequence: model the wage tax exposure for the household's actual employment situation first, then compare specific properties with specific tax bills, then visit. Not the other way around.
A Worked Example
Consider a composite case — a Nassau County household relocating for a Philadelphia-area position, selling a colonial that comped near $1,090,000.
Their initial plan was a Center City rowhouse, on the reasoning that housing costs were dramatically lower. Running the wage tax against their household income changed the analysis: as city residents they would pay it on all earned income, and the annual figure was large enough to consume a substantial share of what they were saving on housing and property taxes combined.
They looked at suburban Montgomery County instead. Housing cost more than in the city, property taxes were higher than they had assumed, and the wage tax exposure dropped substantially because the position was located outside city limits.
On the New York side, they sold first. Their attorney ran an early title review that turned up an unclosed 2016 permit, resolved before listing. They also learned — usefully, in advance — that no attorney would be running the Pennsylvania closing, and retained separate counsel there for contract review because they wanted it.
Where to Start
Get a real number on the Long Island home and build the net-proceeds model before touring anything. Model the Philadelphia wage tax against the household's actual employment situation, with a Pennsylvania accountant, before choosing between city and suburbs. Call the town or village building department and ask what permits are on file. Engage a New York real estate attorney early. Pull actual property tax bills on both ends and compare property to property. And decide in advance whether you want an attorney reviewing the Pennsylvania purchase, since one won't be there by default.
Sellers wanting a current read on where their Long Island home sits can start with a quiet look at present value, and more market and process coverage lives in Local Insights.
The Honest Bottom Line
Philadelphia is genuinely more affordable than Long Island on housing, and for many households the move improves their financial position substantially. That headline is accurate.
What complicates it is the wage tax, which most comparisons omit and which applies to income rather than property — meaning it doesn't shrink when you buy a smaller house. Households that model it honestly before choosing where to live tend to make better decisions than those who compare listing prices and move.
The other adjustment is procedural rather than financial. Pennsylvania closings run through title companies rather than attorneys, and a New York seller should decide deliberately whether they want counsel involved anyway. For anyone working through what their Long Island home would net before any of the Philadelphia decisions get made, that conversation is available whenever the timing suits.
This is general information, not legal, tax, or financial advice. Pennsylvania wage tax rates, transfer taxes, and property tax structures are set at multiple levels of government and change over time. Confirm current figures with a Pennsylvania accountant and a local real estate professional, and confirm New York specifics with a licensed New York real estate attorney and a CPA.
FAQs
Is Philadelphia actually cheaper than Long Island?
On housing, yes, and often substantially. The complication is the Philadelphia city wage tax, which applies to earned income for city residents and, at a lower rate, to non-residents working within city limits. There is no Nassau County equivalent. Because it taxes income rather than property, it doesn't shrink when a household buys a smaller home — which means it can consume a meaningful share of the housing savings for higher-earning households. The comparison worth running is total annual cost including the wage tax, not listing prices.
Does Pennsylvania require an attorney to buy a home?
No, and this is a real adjustment for New York sellers. Pennsylvania residential closings are typically handled through title companies using standardized forms, without an attorney necessarily involved on either side. New York reserves contract drafting and negotiation to licensed attorneys, so anyone who has only transacted here will find the Pennsylvania process unfamiliar. Buyers who want legal review of the agreement need to retain counsel separately and pay for it — a decision worth making before the transaction starts rather than partway through.
What transfer taxes apply when buying in Pennsylvania?
Pennsylvania imposes a realty transfer tax at the state level plus a local component, and in Philadelphia the local portion pushes the combined rate substantially above what New York charges. It is customarily split between buyer and seller, though that's negotiable. Rates vary by municipality and change, so current figures should be confirmed with a Pennsylvania agent or title company for the specific location. On the Long Island side, the seller pays New York State Transfer Tax at four dollars per thousand.
Can I keep working in Manhattan if I move to Philadelphia?
Not practically on a daily basis. Amtrak and NJ Transit connections exist and a small number of people make the trip, but the time and cost make it unsustainable as a routine commute. This move suits households changing employers, working remotely, or taking a Philadelphia-area position. Anyone whose work genuinely requires regular Manhattan presence should be looking at Westchester, northern New Jersey, or Connecticut rather than Philadelphia.
Should I sell my Long Island home before buying in Pennsylvania?
Generally yes for an interstate move. Selling first produces clean funds, a defined budget, and a purchase offer carrying no contingency on another sale — which matters more when the two markets are 120 miles apart and coordinating simultaneous closings is harder. The trade-off is potentially needing temporary housing. Buying first means carrying both properties, which at Long Island price points frequently runs $12,000 to $16,000 monthly combined and pressures the sale toward accepting less.
By Eric Berman, REALTOR® | The Eric Berman Team at Compass
Eric Berman | Long Island & Queens Associate Broker | Compass
1468 Northern Blvd, Manhasset, NY 11030
(917) 225-8596 | eric@ericbermanre.com | theericbermanteam.com
