Tax rates in Bethlehem, PA, depend heavily on which side of the county line your property sits on and what kind of income you earn. Property owners in the Northampton County portion of the city face a combined millage of about 93.61 mills, while the Lehigh County portion carries roughly 29.41 mills. On top of that, every resident pays a 1% local earned income tax, Pennsylvania’s flat 3.07% state income tax, and, if they work inside city limits, a $52 annual local services tax. Real estate sales trigger a combined transfer tax commonly cited at around 5%.
Property Tax Rates by County
Three taxing bodies bill Bethlehem property owners: the city, the county, and the Bethlehem Area School District. Each sets its own millage rate, where one mill equals $1 of tax per $1,000 of assessed value. Because Bethlehem straddles two counties, homeowners on opposite sides of the same city see very different rates on paper.
Northampton County Side
Properties in the Northampton County portion of Bethlehem carry the higher published rate. The city levies 19.64 mills, Northampton County adds 10.8 mills, and the Bethlehem Area School District charges 63.17 mills.1City of Bethlehem. Real Estate/Property Tax2Northampton County Assessment Division. 2025-2026 Millage Rates As Of July 1, 20253Bethlehem Area School District. Tax Office Combined, that’s 93.61 mills. A home assessed at $100,000 would owe about $9,361 a year across all three bills.
Lehigh County Side
The Lehigh County side of the city runs at a much lower combined millage. The city’s share drops to 6.21 mills, the county adds 3.78 mills, and the school district charges 19.42 mills.1City of Bethlehem. Real Estate/Property Tax3Bethlehem Area School District. Tax Office That totals 29.41 mills, or roughly $2,941 a year on a $100,000 assessed value.
Why the Gap Isn’t What It Looks Like
The three-to-one difference between the two sides doesn’t translate to a three-to-one difference in real tax bills. The gap largely reflects how each county assesses property. Northampton County’s assessed values tend to sit well below market price, while Lehigh County’s assessments run closer to actual market value. A home that sells for $300,000 might carry a $100,000 assessed value in Northampton County but a considerably higher assessed value in Lehigh County, so the lower Lehigh millage applied to a larger base can produce a comparable dollar bill. Look up your property’s actual assessed value at the county assessment office before comparing rates.
Property Tax Deadlines and Late Penalties
The city portion of your property tax bill is due by May 29 each year. Pay the full amount before March 31 and you get an early-payment discount. Quarterly installment plans exist, but they don’t qualify for the discount.1City of Bethlehem. Real Estate/Property Tax
Miss the deadline without enrolling in the installment plan and a 10% penalty gets added. Any balance still unpaid at year-end is turned over to Portnoff Law Associates for collection. Not receiving a bill doesn’t excuse late payment under Pennsylvania law, so contact the city tax office directly if you’ve moved or changed your mailing address.1City of Bethlehem. Real Estate/Property Tax County and school district taxes bill on their own schedules, so expect multiple bills across the year rather than a single combined statement.
Earned Income Tax
Every Bethlehem resident with wages or self-employment income pays a 1% local earned income tax, split evenly between the city (0.5%) and the Bethlehem Area School District (0.5%).4City of Bethlehem. Earned Income Tax (EIT) Withholding Pennsylvania employers typically withhold it from paychecks automatically. Self-employed residents and anyone with an out-of-state employer need to make quarterly estimated payments on their own.
Keystone Collections Group handles collection. Every resident with earned income has to file an annual return with Keystone by April 15, even if withholding covered the full amount and no refund is expected.5Keystone Collections Group. File Your Local Earned Income Tax Return Online It’s a filing obligation separate from your federal and state returns, and it catches people off guard.
Local Services Tax
Anyone who works within Bethlehem city limits owes a flat $52 Local Services Tax per year, regardless of where they live. Employers withhold it at $1 per week, and the money funds police, fire, and road maintenance.6City of Bethlehem. Local Services Tax (LST) Withholding
If your total net income from all sources falls below $12,000 in a year, you can file for an exemption. Active-duty military personnel, disabled veterans, and clergy may also qualify.7City of Bethlehem. Local Services Tax (LST) The exemption isn’t automatic. You need to file a certificate each year with the city, the tax officer, and your employer.
Realty Transfer Tax
When property in Bethlehem changes hands, transfer tax is owed on the sale price or fair market value, whichever is higher. Pennsylvania charges 1% at the state level.8Commonwealth of Pennsylvania Department of Revenue. Realty Transfer Tax The City of Bethlehem and the school district add a local share on top, bringing the combined rate to roughly 5%. On a $300,000 sale, that’s about $15,000 in transfer tax at closing.
Buyers and sellers typically negotiate how to split the bill at closing. A 50/50 split is common but not required by law. Build the cost into your budget early, particularly if you’re moving from a state with lower transfer taxes.
Pennsylvania State Income Tax
On top of the 1% local earned income tax, every Bethlehem resident pays Pennsylvania’s personal income tax at a flat 3.07% on taxable income.9Commonwealth of Pennsylvania. Personal Income Tax Pennsylvania offers no standard deduction or personal exemption comparable to the federal system, so the rate applies broadly to wages, investment income, and retirement distributions. Combined with the local EIT, the state-and-local income tax load on a Bethlehem resident is 4.07% before federal tax enters the picture.
Tax Relief and Reducing Your Bill
Homestead Exclusion
Owner-occupants of a primary residence generally qualify for the homestead exclusion, which lowers assessed value before the school district tax is calculated. For the 2025–2026 school tax year, the Bethlehem Area School District set the exclusion at $5,696 for Northampton County properties and $18,529 for Lehigh County properties.10Bethlehem Area School District. Homestead Farmstead Resolution 2025-2026 Applications are due by March 1 before the tax year in which the reduction takes effect. If you haven’t filed, contact the county assessment office.
Property Tax/Rent Rebate
Pennsylvania offers rebates of up to $1,000 on property taxes or rent for qualifying residents: those 65 or older, widows and widowers 50 or older, and people with disabilities 18 or older. For the 2025 tax year, the household income limit was $48,110, and half of Social Security income can be excluded when calculating eligibility.11Pennsylvania Treasury. Treasurer Stacy Garrity Announces $314 Million Distributed Through Property Tax/Rent Rebate Program in 2025 Applications for that year ran through June 30, 2026. Income limits and deadlines are updated annually on the Pennsylvania Treasury site.
Assessment Appeals
If you believe your property’s assessed value is out of line with actual market value, you can file an appeal with the county board of assessment. Each county sets its own process and deadline. In Lehigh County, the petition must be filed within 30 days of receiving your formal assessment notice, and copies must be served on the school district, municipality, and county solicitor. Northampton County runs a comparable process through its own board. A successful reduction lowers your bill every year going forward, so the paperwork can pay off well beyond the initial year.