Falling behind on Real Estate Tax in Philadelphia is more common than people admit, and the letters can be frightening. The good news is that the City treats a tax sale as a last resort and has real tools to keep homeowners in their homes. The other news is that the debt does not go away on its own. Here is how the process works and where selling fits in.
How unpaid taxes build up
Philadelphia Real Estate Tax is billed for the calendar year and is due by March 31. Once a bill goes unpaid, interest and penalties start adding up, the account can be sent to a collection agency or law firm, and eventually the City can put a lien on the property. A lien makes the house harder to sell or refinance, because it has to be paid before a buyer can get clear title. Left alone long enough, the City can go to court and have the property sold at a Sheriff Sale.
If you live in the house: look at an OOPA first
Homeowners who live in the property can apply for an Owner-Occupied Payment Agreement, or OOPA. The payment is based on household income and size, or on household expenses, and there is no down payment. The City says that as long as you are enrolled and following the terms, the agreement protects your home from a tax sale. The debt still exists, but you are considered in good standing. You can apply online through the Philadelphia Tax Center, at a municipal services center, or by email. If you want to keep the house, this is usually the first call to make.
How a tax Sheriff Sale works
If taxes stay unpaid and there is no agreement, the City (or a firm working for it) can file a lawsuit to foreclose its tax lien, and the court can order the property sold at a Sheriff Sale. Beyond the taxes themselves, the owner can end up owing legal costs and sheriff's fees. For owner-occupied homes there is a right to redeem the property for a period after the sheriff's deed is recorded, but redemption means paying the full amount, which is hard for most families who were behind to begin with. Do not wait for a sale date to act.
When selling makes more sense
Some owners are behind on taxes on a house they do not live in: an inherited house, a rental, or a vacant property. Those houses do not qualify for an OOPA, and the debt keeps growing. Others live in the house but are behind on taxes, water and repairs all at once. In those situations, selling can be the cleanest exit. When you sell, the title company gets the payoff for the taxes and any water or other city liens, pays them from the proceeds at closing, and you receive what is left. A settlement statement shows every dollar.
Selling to us with back taxes
We buy Philadelphia houses with back taxes, water liens and code violations, as-is. Tell us what you know and the title company will pull the full picture. Our written offer shows the price, and the settlement statement shows each lien paid. If you live there and would rather stay, we will tell you to look at an OOPA first.