Pennsylvania Land Sales, Tax Foreclosure Sales or Property Tax Sales

This Commonwealth of Pennsylvania has 67 counties. Tax sales are held by the Tax Claim Bureau of each county after the county has acquired the property through foreclosure procedures. Normally, tax sales are held in September of each year after the property taxes have been delinquent for two years. In the event property is not sold at the tax sale auction for the upset price then the propoerty is held over for three months for private sale. If the property still doesn't sell in that three month span, the court then decides whether to free the property of all leins against it. Some excellent bargains can be had with a little research.



Currently the state of Pennsylvania is NOT offering Tax Lien Certificates. NONE of the current 67 counties issue tax lien certificates. Instead local counties offer Pennsylvania Tax Deeds. When a Pennsylvania home owner refuses to pay their property taxes then the taxing district will sell the property to the winning bidder at annual tax sale auction.



Pennsylvania is a good state for buying foreclosed properties at property tax auctions. The state supports the sales and usually many properties are available.

At these sales, entire properties can sometimes be obtained for pennies on the dollar. They can also be called Pennsylvania Land Sales, Tax Foreclosure Sales or Property Tax Sales.



You must research before you buy so you know what property your are purchasing your Pennsylvania tax deed on. The last thing you want is a property with major problems. Sometimes property owners will let property taxes go unpaid as a way of getting rid of a property without having to disclose serious problems or costs involved in cleaning or fixing it up.



The Tax Claim



Real Estate tax sales in Southeastern Pennsylvania counties (other than Philadelphia) are held in September of each year. Unpaid real estate taxes become delinquent on January 1st of the year following the year when the taxes are due (for example, 1999 taxes became delinquent on January 1, 2000). The taxing authorities return a claim for unpaid taxes to the County Tax Claim Bureau by April 1st. The Tax Claim Bureau acts as the agent for the taxing authorities in a county. Delinquent taxes can be paid only to the Tax Claim Bureau, not to the local tax collectors. Interest is charged at the rate of 9 percent per year.



A notice of the tax claim is sent to the owner by certified mail by July 31st of the year after the taxes are due. The tax claim becomes absolute on the following January 1st, but may be discharged until July 1st of the following year. The redemption period runs until the property is sold at the public sale in September.



The Tax Sale



Upset tax sales are scheduled in September at the county courthouse for unpaid township or borough, county and school district real estate taxes. The sales in 2000 will usually be for unpaid 1998 taxes. Notice of the sale is given by publication in a legal publication and in two papers of general circulation at least 30 days prior to the sale. The Tax Claim Bureau gives written notice to each owner by certified mail. The property must be posted at least ten days prior to the sale. Mortgagees and other lienholders do not receive personal notice of either the tax claim or the tax sale. A tax sale will not divest prior unpaid liens of record, such as mortgages and judgments. The sale will, however, divest liens of all taxes and municipal claims which are included in the upset price. There is no right of redemption after the property is sold at tax sale.



Removal From Sale



The owner or any lien creditor may, prior to the sale, pay the delinquent taxes in full to discharge the tax claim. Alternately, the owner or any lien creditor may enter into an agreement with the Tax Claim Bureau to pay the taxes, charges and interest in installments. The terms of an installment agreement require an initial payment of twenty-five percent of the amount due on tax claims filed and an agreement to pay the balance in three subsequent installments, all within one year.



Upset Tax Sale



The upset price is the minimum price for which the property may be sold. It includes the claim for delinquent real estate taxes, corporation tax claims of the Commonwealth of Pennsylvania, municipal claims and costs of notice and sale. Real estate taxes for the current year will usually be added. Property may be sold at or above the upset price at a public auction sale conducted by the Tax Claim Bureau.



The purchaser must pay the entire purchase price on the day of the sale. There are no restrictions concerning who may bid at the public sale. The purchaser is required to pay real estate transfer taxes on the Tax Claim deed based on the fair market value of the property.



Within thirty days after the sale, the Tax Claim Bureau sends written notice of the sale to the owner. Within sixty days of the sale, the Bureau files a petition for confirmation of the sales by the court. The owner may file objections to the confirmation of sale within thirty days following confirmation. The objections may question the regularity or legality of the sale, including notice of the sale, but may not raise the legality of the taxes. After the court has confirmed the sale, the Tax Claim Bureau executes and records a deed for the property to the successful bidder. While Tax Claim deeds are valid, some title insurance companies will not insure them, so it may be necessary for the purchaser to file an action to quiet title against the former owner to get insurable title.



Federal Tax Liens



If there are federal tax liens against the property, there are important considerations which must be addressed prior to the tax sale concerning the rights of the Internal Revenue Service.



Warning to Mortgagees



If a mortgagee purchases the mortgaged property at a tax sale, there may also be an issue whether the acceptance of a Tax Claim deed has the effect of extinguishing the mortgage because the mortgage may be merged in the new tax claim deed. The mortgagee should clearly express its intention not to merge the mortgage into the tax title.