What Happens If I Don't Pay Property Taxes in Pennsylvania?

Unpaid real property taxes in Pennsylvania could lead to an upset tax sale or a judicial tax sale—and the loss of your property.

Below is a summary of how Pennsylvania tax sales work, but tax sales in Pennsylvania are complicated. Consider talking to a licensed Pennsylvania attorney to get details about the process in your county.

Information on How Property Taxes Work Generally

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account.

But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

How Tax Sales in Pennsylvania Work

Property tax sales in Pennsylvania are usually governed by the state's Real Estate Tax Sale Law. Under this law, if you get behind in your property taxes, your home is first put up for sale at an upset tax sale.

If the property doesn't sell, the home is then usually sold at a judicial tax sale. If a property doesn't sell at the judicial sale, it goes on the repository list.

Upset Tax Sales in Pennsylvania

At an upset tax sale, a tax-delinquent home is sold subject to existing liens such as mortgages, judgments, and other liens. (72 P.S. § 5860.609).

Notice Before an Upset Tax Sale in Pennsylvania

At least 30 days before the sale, the tax claim bureau must mail you (the owner) a notice by certified mail. If it doesn't get a return receipt, the bureau must send another notice by first-class mail, at least ten days before the sale. (72 P.S. § 5860.602).

The bureau must make reasonable efforts to locate you and provide notice if the mailed notification is returned without the required signature or other circumstances raise doubt about whether you've received notice of the sale. (72 P.S. § 5860.607a). If the home is owner-occupied, the bureau must give written notice of the sale by personal service at least ten days before the sale or petition a court to waive this requirement. (72 P.S. § 5860.601).

Publication and Posting

The bureau must advertise a notice of the pending sale in a newspaper at least 30 days before the scheduled sale. The notice must also be posted on the property at least ten days before the sale. (72 P.S. § 5860.602).

How to Stop a Tax Sale in Pennsylvania

You can stop the sale by:

• paying the total amounts due, including taxes, charges, and interest, or
• entering into an agreement to make payments in installments. The first installment must be 25% of the tax debt and the remaining amount must be paid in no more than three payments within one year of the agreement date. (72 P.S. § 5860.603).

Judicial Tax Sales in Pennsylvania

If the home doesn't sell at the upset tax sale, the bureau may sell the property at a private sale or petition the court (that is, file a lawsuit) for an order to sell the home at what's called a "judicial tax sale." (72 P.S. § 5860.605, § 5860.610).

Unlike with an upset tax sale, homes that are sold at a Pennsylvania judicial tax sale are sold free and clear of liens. (72 P.S. § 5860.612).

How Judicial Tax Sales Work in Pennsylvania

After the tax claim bureau files its petition, the court will set a date for the judicial tax sale. (72 P.S. § 5860.612). Both upset tax sales and judicial tax sales are conducted as auctions.

Notice by Publication

If the bureau files its petition three months or more after the scheduled upset sale date, then the sale must be advertised in a newspaper at least 30 days prior to the sale. (72 P.S. § 5860.612). But if the petition is filed within three months of the scheduled upset sale date, the sale isn't advertised in a newspaper.

Repository of Unsold Properties in Pennsylvania

If the home doesn't sell at the judicial tax sale, it goes into the repository of unsold properties. (72 P.S. § 5860.626). The bureau may then, with the written consent of all the taxing districts where the property is located, sell the home without further court approval or publication in a newspaper. (72 P.S. § 5860.627).

The property is then conveyed to the purchaser free and clear of liens. (72 P.S. § 5860.627).

Can You Redeem the Property After a Tax Sale in Pennsylvania?

Many states give delinquent taxpayers the chance to pay off the amounts owed and keep the home. This process is called "redeeming" the property.

How the Right to Redeem Usually Works

In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property.

In other states, though, the redemption period happens before the sale.

You Might Get the Right to Redeem the Property After a Pennsylvania Tax Sale

The issue of whether or not you get to redeem your home after a tax sale in Pennsylvania is complex. In general, Pennsylvania's Real Estate Tax Sale Law says that you can't redeem your home after a sale. (72 P.S. § 5860.501). But you might be able to redeem in some circumstances.

Some counties permit redemption. Some counties provide a nine-month redemption period during which you may redeem the home (53 P.S. § 7293).

You might be able to redeem if the county buys the home. Under some circumstances, if the county purchases your home at the tax sale, it may permit you to redeem (72 P.S. § 5879). To redeem from the county, you'll have to pay all taxes with interest and costs, but less any penalties (72 P.S. § 5879).

Hiring counsel. To get specific information about redeeming your home after a tax sale in your particular county in Pennsylvania, your best bet is to consult an attorney.

Invalidating an Upset Tax Sale in Pennsylvania

In some cases, you might be able to invalidate a tax sale.

After an upset tax sale, the tax claim bureau must file a report (a return) with the court. Within 30 days after the court confirms the return, you can file an objection with the court if the proper procedures weren't followed during the sale (72 P.S. § 5860.607).

For example, you can file an objection if you weren't given proper notice of the sale. If the court agrees with you, it may decide to set aside (invalidate) the tax sale (72 P.S. § 5860.607).

What Options Do I Have If I Can't Afford to Pay My Property Taxes in Pennsylvania?

In most cases, taking steps before you fall behind in your Pennsylvania property taxes is a good idea to try to make them more affordable. For example, you might be able to:

• get a property tax abatement (which will reduce your tax bill) or
• challenge the assessed value of your home (if you think it is incorrect) to decrease the amount of taxes you have to pay.

Talk to a Lawyer

If you're already facing a property tax sale in Pennsylvania and have questions (or need help redeeming your property), consider talking to a foreclosure, tax, or real estate lawyer.