If you are behind on your property taxes in Pennsylvania, you may lose your house by way of a tax sale. Taxes are collected in a number of methods at the state, federal, and municipal levels. In Pennsylvania, tax money is utilized to fund public schools, state highways, state law enforcement, courts, water infrastructure, and other services that benefit the majority of Pennsylvanians.
This article will serve as a resource to assist you to learn more about property taxes and how long you can go without paying them in Pennsylvania.
Pennsylvania Tax Process
Anyone in Pennsylvania who owns taxable property is required to understand the Pennsylvania tax process as well as pay real estate tax. Typically, the owner of a property is responsible for paying real estate taxes. However, anybody with a stake in a property, such as a resident, should ensure that the real estate taxes are paid.
The payments are due on March 31st. The Department of Revenue often mails real estate tax returns to property owners in December, many months before the due date in March. For example, both the Philadelphia School District and the City of Philadelphia levy a tax on all real estate in the city. The rates for the 2022 tax year are as follows:
0.7681% (School District) + 0.6317% (City)= 1.3998% (Total)
If you do not pay your real estate taxes by March 31, further charges – including interest – will be imposed on the tax’s principal amount. These charges, known collectively as “additions,” accumulate at a rate of 1.5 % every month from April 1 through January 1 of the next year.
If taxes are not paid by January 1 of the subsequent year, the main balance is increased by a maximum of 15%, the taxes are reported as overdue, and liens are filed in the amount of the overall delinquency, including additions. At a sheriff’s sale, the city can start selling your house. In addition, the city of Philadelphia provides a variety of income-based support programs for owner-occupied homes and senior citizens. These programs include:
- Senior citizen with limited income real estate tax freeze. Income-based senior citizen program that “freezes” real estate taxes to prevent future increases.
- Agreement for Owner-Occupied Real Estate Tax Payment (OOPA). Income-based program for homeowners who have delinquent Real Estate Taxes and may be eligible for a monthly payment plan.
- Program for Long-Term Owner Occupants (LOOP). Income-based program for homeowners who have had their property assessed significantly higher.
- Real estate tax payment plan. Through December 31st, eligible homeowners can settle current year real estate taxes in up to 12 monthly installments.
- Real estate tax abatement plan. Income-based program for homeowners facing Real Estate Tax hikes of 15% or more.
- National Guard and Active Duty Reserve members who serve outside of Pennsylvania are eligible for tax breaks.
Pennsylvania also has an income-based rent rebate and property tax program for senior citizens. For complete application and eligibility information, go to the Commonwealth of Pennsylvania website.
Length You Can Go Without Paying Property Taxes in Pennsylvania
When it comes to the length you can go without paying property taxes in Pennsylvania,
the Pennsylvania Property Investment Tax Sale Regulations require a fair and effective way of collecting outstanding real estate taxes on behalf of taxing authorities who use the County Tax Claim Bureau’s services.
The legislation allows delinquent taxpayers to effectively discharge outstanding tax claims at reasonable costs while also allowing for the transfer of non-tax-paying property into the hands of responsible taxpayers.
As a result, property taxes (county, municipal, or school) that have not been paid to the local tax collector by December 31 of the fiscal year in which they are levied, might well be filed with the Tax Claim Bureau for particular collection methods, as follows:
1. The first year
Taxing authorities must file any unpaid and overdue real estate taxes with the Tax Claim Bureau by the third Monday in April of the year following the year of levy. Each underpaid tax claim has assessed a cost of $15.00.
Notices of delinquent tax claims are addressed to the owner of the record no later than July 31. The notice informs the taxpayer that he or she has one year from the date of the notice to completely settle the claims, interest accrual (9% per year), and charges, or the property would be marketed and subject to an Upset Tax Sale. The cost of sending is calculated based on the size of the package.
2. The second year
If the claims for outstanding taxes, interest, and charges are not paid, a notice about pending Upset Sale is issued to each record owner no later than July 31 through certified mail, special delivery. The cost of sending is applied to the package.
The sale notices notify the delinquent taxpayer that the asset will be auctioned off no earlier than the second Monday in September except when the interest accrual, tax claims, and costs are covered.
The taxpayer can request to enter into a contract making payments in four equal installments, with the initial installment submitted at the time of decision and the other partial payments to be made quarterly over the course of one year. The parcel is subject to a $25 charge.
3. The third-year
If a property is put up for Upset Sale and does not sell, it will be placed for a judicial court-ordered sale. Title searches are necessary for properties that will be subject to a Judicial Sale in order to identify lienholders and other parties specified in the abstract. The Sheriff who performs the services notifies lienholders, deputizes sheriffs from other Pennsylvania counties, or provides certified postal notice to out-of-state parties. Each parcel bears a proportionate share of the expense of the Sheriff’s action.
4. After the third year
If unsold properties are not sold during the judicial court-ordered sales, they will be placed in the repository of unsold properties.
Any delinquent taxpayer/owner may indeed redeem their property if all claims for late taxes, interest accrual, and Bureau expenses are completely satisfied and discharged. There will be no formal payment arrangement, and the property may be purchased by an interested party without disclosure to the owner.
What Happens If You Stop Paying Property Taxes in Pennsylvania?
As a property owner, you could be worried and your mind is running wild asking, What happens if you stop paying property taxes in Pennsylvania? In most cases, Pennsylvania property tax sales are controlled under the Real Estate Tax Sale Law of the state.
If you go behind on your real estate taxes, your house is initially placed up for auction at an upset tax foreclosure under this statute. If the asset fails to sell, it is normally auctioned at a judicial court tax sale. If an asset fails to sell during the judicial sale, it is placed on the repository record.
Can You Lose Your House If You Don’t Pay Property Taxes in Pennsylvania?
If you owe money on your property taxes in Pennsylvania, you may lose your house in a tax auction. When a homeowner fails to pay their real estate taxes, the outstanding sum is recorded as a lien on the asset. Liens are claims issued on your home to guarantee that you make the payments; it effectively serves as security for the obligation.
To recoup outstanding taxes, most states have laws allowing the local authority to sell a home through a tax foreclosure procedure. As a result, failing to pay your real estate taxes in Pennsylvania may end in judicial tax sales or upset tax sales, and you may lose your property.
What to Do If You Can’t Afford Property Taxes in Pennsylvania
The city has a number of real estate tax abatement and exemption schemes. Among these programs are:
- All Philadelphia homeowners who submit an application will be granted a homestead exemption. This program decreases the taxable component of your property assessment by $45,000 beginning with the 2020 Real Estate Tax bill and continuing in subsequent years.
- Property tax discounts are available for both residential and commercial enterprises. By making properties more affordable, abatements stimulate new buildings or renovation.
- Non-profit tax exemptions are available to eligible non-profit organizations.Catastrophic loss compensation is provided to persons whose property has been devastated by a fire or other natural disaster. To qualify as a catastrophic event, the damage must result in a 50% or greater drop in property value.
- The Commonwealth of Pennsylvania also provides a disabled veterans real estate tax exemption, which exempts a veteran’s house from property tax if the veteran has a service-connected disability.
Your house is subject to property taxes whether you live in Pittsburgh, Philadelphia, or any other Pennsylvania city.
The deadline for paying real estate taxes is March 31. The city will shortly send your case to a collection agency, and a tax lien will be placed on your property. If you disregard your obligation, you may lose your home in a Sheriff Sale.
The rules governing property taxes and foreclosures are complex. Lenders and servicers make mistakes and fail to complete responsibilities on a regular basis. If you feel your lender or servicer failed to perform a required step, breached federal or state foreclosure standards, or committed an error, you could have a claim that might force the foreclosure to be resumed, or you may have the authority to negotiate an alternative.
If you’re looking for companies that buy houses in Pennsylvania, at Problem Property Pals, we buy houses Philadelphia and Florida areas. Additionally, you need to understand why selling your house for cash can be a great option.
Give us a call if you need to know when to sell your home but don’t want the difficulties that come with it (such as showings and repairs).