Tax year: The Pennsylvania tax year runs January – December of the current year. Taxes are generally paid annually. Taxes are calculated using the assessed value of the property. Certain areas have a city tax along with the county tax.
Pennsylvania counties also have a school district tax, this tax generally runs from July 1st through June 30th of the following year. This tax is paid annually.
Pennsylvania Tax Collectors by County:
Click here for our comprehensive list of Pennsylvania Tax Collectors, by county, with contact information for each.
County Online Property Tax Information:
Counties in Pennsylvania typically require a tax certification form be ordered which is an official document detailing current tax rates, due dates, and what taxes have been paid. Due to such, online property taxes are not yet avalible.
Payment of Property Taxes at Closing:
In refinances, most lenders require that taxes are current and up to date and all taxes due within 30-90 days of closing are collected and paid at closing.
The same is true for sales. Additionally, taxes for sales are prorated in such a manner that the seller will pay taxes through settlement, or credit the buyer with the same. From the date of settlement forward, the buyer shall pay taxes.
Be aware, that it can take up to two years for the new owners name to appear on tax bills. However, the purchaser is responsible for all taxes, and other county and state fees, such as water or sewer, from the date of closing. Likewise, all bills prior to closing remain the sellers responsibility.
All closings involving properties with public bills being assessed to it, will be required to pay all such bills current through closing, by the seller, after which said bills will be the responsibility of the buyer. Were possible, these items are prorated on the HUD; in some situations, the seller must contact the county to advice of the pending transaction, and arrange for the change over and payment of final bills.
Failure to pay the above mentioned items in a timely manner can affect the final recording of the deed on the property.
Recording fees in Pennsylvania are based on the number of pages of the document. Generally, a deed will be two pages and cost 45 dollars to file. Most counties charge $45.00 for the first four pages of a deed of trust and between $2.00 and $4.00 per additional page of the document. This varies from county to county.
Pennsylvania State Excise Tax (aka Stamps or Transfer Tax):
In sales, the State of Pennsylvania charges an excise tax for sales transactions based on the consideration. The state and county may each impose the tax. Most counties charge a county transfer tax of 1 percent as well. The state tax rate is 1percent of consideration.
Traditionally, these taxes are split between the buyer and the seller in Pennsylvania.
Determining Property Ownership:
Pennsylvania does not have a real property data base at this time. Property ownership is best determined by contacting or visiting the Land Records department of the County Circuit Court. Click here for a list of the Circuit Courts for each county in Pennsylvania. In Pennsylvania, a title exam used for a real estate transaction must be conducted under the supervision of a licensed Pennsylvania attorney.
Pennsylvania Title Insurance Rates:
Click here to see a calculator of Pennsylvania title insurance rates.
1099 Reporting to the IRS:
At closing, the seller will review a Certification of No Information Reporting if the sale of their property results in proceeds of less than $250,000 as an individual or $500,000 if a married couple.
If the proceeds are higher than this, the seller may chose to have the title company report the 1099 filing to the IRS, or may elect, in writing, to have the tax accountant or attorney do their 1099 filing.
Investment Properties and Commercial Transactions:
If you are buying an investment or commercial property, please notify the title company prior to closing so we can help you meet all counties requirements regarding the same.
If your property is going to be a part of a 1031 exchange, you must also notify the title company prior to closing. Failure to do so could result in transaction not going through an intermediary. Even the failure to correctly follow any of the required steps under the Federal Tax Law regarding 1031 Exchanges, will negate the transaction, and the tax benefits will no longer be available.
Further, a Qualified Intermediary will be provided. At The South Mountain Group, Inc. our intermediary?s are all Certified Public Accountants, and will guide you step by step through the process.
Click here for more information about 1031 Exchanges.
Payoffs and Liens and Judgments:
All current liens against the property must be paid at closing to ensure the first position of your new lenders deed of trust. A title examination ensures that all recorded liens will be found, allowing us to collect for them, as well as to pay them off.
In some instances, the current liens are the expected deed of trusts, such as a first or second mortgage against the property.
Your current lender must provide a payoff. Some lenders will require a signed Release of Information from the borrower in order to provide the title company with this payoff.
You may be contacted to assist in obtaining a final payoff. Although rare, some lenders, contrary to the excepted practice and customary courtesies of most lenders today, will not cooperate in providing a third party with a payoff.
In those situations, you will be asked to contact the lender yourself, to ask for a payoff.
Payoffs are different from the principal balance of a loan in that a payoff includes any prepayment penalties, interest, and fees. A final payoff is a requirement of closing. Payoffs are requested to be good for a minimum of 10 days past your closing date.
Any additional liens found recorded against the property will also need to be collected and paid at closing. Again, you may be asked to provide specific information about any lien, in order for a proper and final payoff of the lien be obtained.
A judgment search is also run for borrowers and sellers and any judgments that affect or could affect the title to the property will be collected and paid at closing.
Pennsylvania does vest title to married couples as tenants by the entirety, judgments against one spouse or the other will generally not attach. Any Federal tax lien will attach regardless.
In all other situations, judgments must be paid, with certain exceptions, such as the age of the judgment, or the type of judgment.
Click here for more information about PA Courts.