How Do Tax Sales Work in Pennsylvania?

In the United States, just about everything is potentially taxed. Real property is certainly no exception to that general rule. When the owner of real property fails to pay the tax obligation on the property the tax authority may eventually have the right to foreclose on the property. At the end of the foreclosure process the property will be sold at a tax sale. Whether you are a property owner, a lien holder, or a potential purchaser you may wish to know how tax sales work in Pennsylvania.
In the Commonwealth of Pennsylvania there are actually two different types of tax sales – the “Upset Tax Sale” and the “Judicial (Free and Clear) Tax Sale” – both of which are conducted like any other auction with the highest bidder “winning” the property. Each county determines when they will conduct the respective tax sales as well as the procedures for the sale; however, the Upset Tax Sale is generally held in the fall and the Judicial Tax Sale in the spring.
The starting bid in the Upset Tax Sale is typically determined by combining the total amount of delinquent taxes, any current taxes as reported, municipal liens, and the value of any costs the county incurred to date. Potential bidders must register ahead of time in order to participate at the auction. The winning bidder must typically pay for the property in full at the time of the auction. In an Upset Tax Sale, the property is conveyed to the winning bidder “under and subject to the lien of every recorded obligation, claim, lien, estate, mortgage, ground rent and Commonwealth tax lien not included in the upset price with which said property may have or shall become charged or for which it may become liable.”
The Judicial Tax Sale then follows the Upset Tax Sale. The purpose of the Judicial Tax Sale, also referred to as the “Free and Clear” Tax Sale, is to put the property back on the tax rolls. The procedure for participating in a Judicial Tax Sale is essentially the same as that for an Upset Tax Sale. Prospective bidders must register ahead of time, highest bidder wins the property, and the winning bidder must pay for the property that day. The purchaser at a Judicial Tax Sale “shall take and thereafter have an absolute title of the property sold, free and clear of all taxes, including (current) County and Municipal tax bill, (current) School tax bill, municipal claims, mortgages, liens, charges and estates of whatsoever kind except ground rents separately taxed or preserved by Statute.”
If you have additional questions or concerns regarding the tax sale process in Pennsylvania, contact an experienced Conshohocken, Pennsylvania real estate law attorney as soon as possible to discuss your options. Contact the real estate law attorneys at Curley & Rothman, LLC by calling 610-834-8819 today to schedule your free consultation.