Behind on property taxes in Pennsylvania? Upset sale, judicial sale, and Philadelphia's process
Short answer
Outside Philadelphia, unpaid property taxes go to the county Tax Claim Bureau, and if you don't pay within the one-year discharge period, the home can be sold at an upset sale held in September or later in the year. There is no right to redeem after an upset sale, so the time to act is before the sale date.
- The bureau mails a notice of the tax claim by July 31, and a one-year period to pay starts July 1 of that year (Real Estate Tax Sale Law § 308).
- Upset sales are scheduled no earlier than the second Monday of September and before October 1 (§ 601(a)).
- An owner-occupied home cannot be sold unless the owner gets personal notice at least 10 days before the sale (§ 601(a)(3)).
- Before the sale, you can pay in full or, at the bureau's option, sign an agreement with 25% down and the rest within one year (§ 603).
- Philadelphia uses a different law and lets an occupied home be redeemed within nine months of the sheriff's deed acknowledgment (Municipal Claim and Tax Lien Law § 32).
The Real Estate Tax Sale Law outside Philadelphia
Most Pennsylvania counties collect unpaid property taxes under the Real Estate Tax Sale Law of 1947. It creates a Tax Claim Bureau in each county except counties of the first and second class (Act 542 of 1947). Philadelphia collects its own Real Estate Tax and has its own sale process, covered below. If you live in Bucks County, Lancaster or Pottsville, this is the law that applies to you.
Unpaid bills start with your local tax collector. Then, between January 1 and the last day of April, the collector returns the prior year's unpaid taxes to the bureau. From the first day of the next month, interest runs at 9% a year (§ 306(a)).
Upset sale timeline: notice by July 31, sale in September
Here is how the law's deadlines line up. The years are only an example.
| When (example) | What happens | Source |
|---|---|---|
| Year 1 | County and school taxes go unpaid | - |
| Year 2, by April 30 | Tax collector returns the unpaid taxes to the Tax Claim Bureau; 9% interest starts the next month | § 306 |
| Year 2, by July 31 | Bureau mails one notice of the claim by certified or registered mail; the one-year discharge period runs from July 1 | § 308 |
| Year 2, December 31 | The claim becomes absolute if unpaid and not challenged | § 308(a) |
| Year 3, before July 1 | Paying now keeps the property out of the sale advertisements | § 501(a) |
| Year 3, 30 days before sale | Notice published, and mailed by certified mail, restricted delivery | § 602 |
| Year 3, 10 days before sale | Property posted; owner-occupants personally served | §§ 601(a)(3), 602(e) |
| Year 3, September or later | Upset sale, no earlier than the second Monday of September; can be continued to year-end | § 601(a) |
Paying after July 1 but before the sale still stops the sale. Your name and property may appear in the advertisement, though (§ 501(a)).
The bureau can also stay the sale if, before the sale, you sign a written agreement and pay 25% of what is due, with the balance in no more than three installments within one year. If you default, the bureau can sell at a sale held at least 90 days later, and it won't offer you another agreement for three years (§ 603). Some counties also let owner-occupants with serious hardship apply for an extension of up to 12 more months, if the county commissioners have adopted that option (§§ 502.1, 503.1). Ask your county's Tax Claim Bureau.
The 10-day personal notice for owner-occupied homes
For a home you live in, mail and posting aren't enough. The law says no owner-occupied property may be sold unless the bureau has given the owner-occupant written notice of the sale at least 10 days before the sale, by personal service through the sheriff or a person the county appoints (§ 601(a)(3)).
If the bureau can't serve you within 25 days of asking, it can petition the court to waive personal notice for good cause. The required warning tells you plainly that your property "may be sold for a small fraction of its fair market value" (§ 602(g)).
What happens at and after the upset sale?
The bureau sets an upset price that covers the tax claims, other taxes and municipal claims, and costs, and it won't sell for less (§ 605). An upset sale does not wipe out mortgages or other recorded liens left out of the upset price. The buyer takes the property subject to them (§ 609).
There is no redemption after the sale (§ 308(a)(4)). Within 30 days, the bureau must notify you that the property was sold. You can file objections about how the sale was conducted up to 30 days after the court confirms the sale nisi, but objections can't challenge the taxes themselves (§ 607). If money is left after taxes, claims and liens are paid, the owner is fifth in line to receive it (§ 205(d)).
Judicial and repository sales
If nobody bids the upset price, the bureau can ask the court for a judicial sale. The court issues a rule on everyone with an interest, generally returnable within 30 days. If the court approves, the property is sold free and clear of mortgages and most liens (§§ 610, 612). A property can't go to judicial sale unless it was first exposed to an upset sale and didn't sell (§ 605).
Property that still doesn't sell goes into the county's repository for unsold properties. The bureau can then sell it for a minimum price set with the consent of the taxing districts, without court approval (§§ 626, 627).
Philadelphia's different process
Philadelphia collects its own Real Estate Tax. Bills are due March 31. After that, interest and penalties accrue at 1.5% a month until January 1 of the next year. If the taxes are still unpaid then, a maximum 15% addition is added, the taxes are registered delinquent, liens are filed, and the City can begin the sheriff sale process (City of Philadelphia).
The City offers an Owner-Occupied Payment Agreement (OOPA) for past-due taxes. It requires no down payment, and some low-income and senior residents qualify for payments as low as $0 a month (OOPA). The City's Foreclosure Prevention Program also covers tax foreclosure; call (215) 334-4663 (City).
Philadelphia tax sales happen through the sheriff under the Municipal Claim and Tax Lien Law. Unlike an upset sale, an owner can redeem within nine months of the acknowledgment of the sheriff's deed by paying the amount bid, the deed costs, taxes and other charges the buyer paid, plus 10% annual interest on those amounts. That right doesn't apply to "vacant property." The same individual or family must have lived there for at least 90 days before the sale and still live there when the deed is acknowledged (MCTLL § 32).
Selling before the tax sale
You own the home until the sale, so you can usually sell it first. Delinquent taxes are paid from your proceeds at closing, which stops the sale, and the remaining equity goes to you rather than through a tax sale.
- Get the exact payoff from the Tax Claim Bureau (or, in Philadelphia, the Department of Revenue) and give it to your title company.
- Tell the buyer the sale date so closing can happen before it.
- Ask the bureau about a stay agreement if closing might slip past the date.
Selling is one option among several, alongside a payment agreement, a hardship extension or a housing counselor's help (HUD counselor finder). If a sale makes sense for you in Pennsylvania or Philadelphia, we can give you a written cash offer with no obligation.
Frequently asked questions
When are tax sales held in Pennsylvania?
Outside Philadelphia, county Tax Claim Bureaus schedule upset sales no earlier than the second Monday of September and before October 1, though a sale can be continued to the end of the year (Real Estate Tax Sale Law § 601).
How many years behind on property taxes before a tax sale in Pennsylvania?
There is no single number, but the deadlines usually add up to about two years. Unpaid taxes are returned to the bureau the following spring, the claim notice goes out by July 31, and the property can be sold if it is not paid within the one-year discharge period that runs from July 1.
Can I get my house back after an upset tax sale in Pennsylvania?
Generally no. The Real Estate Tax Sale Law says there is no redemption after the actual sale. You can object to how the sale was conducted within 30 days after the court confirms it nisi, but not to the taxes themselves.
How do I stop a tax sale in Pennsylvania?
Pay the full amount before the sale, or ask the Tax Claim Bureau for a stay agreement with 25% down and the balance within one year. Some counties offer owner-occupants a hardship extension of up to 12 months. Selling the home before the sale also pays the taxes.
Does an upset sale wipe out my mortgage?
No. The buyer at an upset sale takes the property subject to mortgages and other recorded liens not included in the upset price. A later judicial sale, ordered by the court, is the one that sells property free and clear of most liens.
Is Philadelphia different?
Yes. Philadelphia is outside the Real Estate Tax Sale Law. Unpaid taxes become delinquent on January 1 after the year they were due, the City sells through the sheriff, and an owner who lives in the home can redeem within nine months of the sheriff's deed acknowledgment.
Sources
- Pennsylvania General Assembly, Real Estate Tax Sale Law, Act 542 of 1947, §§ 205, 306, 308, 501, 502.1, 503.1, 601–612, 626–627
- Pennsylvania General Assembly, Municipal Claim and Tax Lien Law, Act 153 of 1923, § 32
- City of Philadelphia, Real Estate Tax; Owner-Occupied Real Estate Tax Payment Agreement (OOPA); Save your home from mortgage and tax foreclosure
- U.S. Department of Housing and Urban Development, Find a housing counselor
This is general information, not legal or tax advice. County procedures, sale dates and fees vary, so confirm deadlines with your county Tax Claim Bureau or, in Philadelphia, the Department of Revenue. For advice on your situation, speak with a Pennsylvania attorney.