A Pennsylvania upset tax sale is the county-level auction where the Tax Claim Bureau sells real estate carrying delinquent property taxes to recover what’s owed to the local taxing districts. The minimum bid, called the upset price, bundles every dollar of back taxes, current-year taxes, nine percent annual interest, certified municipal claims, and the bureau’s costs of sale. The catch that ruins most first-time bidders: winning does not clear the mortgages, judgments, or other private liens recorded against the property. You take title subject to all of them.
What the Upset Price Includes
The upset price is the floor. No property can sell for less. Under Section 605 of the Real Estate Tax Sale Law, the bureau builds it by adding six categories together: Commonwealth tax liens, the delinquent tax claim plus interest, any other recorded tax judgments against the property, all accrued taxes including the current year’s levy, certified municipal claims, and the bureau’s costs for running the sale.1Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.605
Interest on taxes returned to the bureau accrues at nine percent per year, calculated from the first day of the month after the return.2Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.306 That rate is set statewide by the law itself. Individual taxing districts may also add their own late-payment penalties before the taxes reach the bureau, so the total on a given parcel can grow faster than the nine-percent figure alone suggests. Current-year taxes get rolled in even if the owner hasn’t missed that deadline yet.
Municipal claims for water, sewer, solid waste, and similar services are part of the upset price only when the municipality or authority certifies the amount to the bureau by August 30 of the sale year.3Pennsylvania General Assembly. Real Estate Tax Sale Law If a municipality fails to certify a claim that existed before August 1, the upset sale wipes it out. A lower-than-expected upset price could mean a buried municipal debt disappeared, or that the municipality hasn’t certified it yet and could still pursue collection separately. Sale costs cover advertising, certified mailings, and posting requirements, and vary by county depending on how many notices the bureau had to send.
The Liens That Survive
This is the single most important thing to understand before bidding. An upset sale conveys title “under and subject to” every recorded mortgage, lien, judgment, ground rent, and Commonwealth tax lien that wasn’t included in the upset price.4Pennsylvania General Assembly. Real Estate Tax Sale Law – Section 609 If a property has a $150,000 mortgage and you win it at auction for $8,000, you now own a property with a $150,000 mortgage still attached. The lender’s lien didn’t go anywhere.
Before bidding on any parcel, run a title search at the county Recorder of Deeds. Look for mortgages, judgment liens, mechanic’s liens, and any other encumbrances. Add those amounts to the upset price to estimate your true cost of acquisition. Skipping this step is the fastest way to turn an apparent bargain into an expensive mistake.
Registering as a Bidder
Act 33 of 2021 added a mandatory registration process. Every person who intends to bid must appear in person at the county Tax Claim Bureau and register at least ten days before the sale.5Pennsylvania General Assembly. Pennsylvania Act 33 of 2021 – Real Estate Tax Sale Law A single registration covers multiple parcels at sales held on the same day in the same county. Otherwise, each sale requires its own registration.
The application asks for your name, residential address, and phone number, and includes a sworn, notarized affidavit certifying four things:
- You don’t owe delinquent real estate taxes to any Pennsylvania taxing district, and you have no municipal utility bills more than one year overdue anywhere in the state.6Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.619a
- You aren’t bidding on behalf of someone barred from participating.
- You haven’t, within the past three years, been convicted of an uncorrected housing code violation or allowed property you own to become a health or safety threat.
- You understand that filing a false application is a second-degree misdemeanor under 18 Pa.C.S. ยง 4904(a).
Pennsylvania caps notary fees for taking a verification on oath at five dollars per act.7Pennsylvania Department of State. Notary Public Fees Some counties also charge a non-refundable registration processing fee.
LLCs and corporations face additional disclosure. A business entity must list the names, business addresses, and phone numbers of all officers. An LLC must also identify every member, manager, and any person with an ownership interest.5Pennsylvania General Assembly. Pennsylvania Act 33 of 2021 – Real Estate Tax Sale Law Every individual named on the paperwork needs a separate affidavit, and whoever appears in person to register must either be the application’s signer or carry documentation proving authority to act for the entity.
After the registration deadline, the bureau shares the approved bidder list with every municipality in the county at least five days before the sale. A municipality can object. If that happens, the bidder is responsible for contacting the municipality to resolve the issue before auction day. Registration doesn’t guarantee approval.
Auction Day
Upset sales are held no earlier than the second Monday of September and before October 1.8Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.601 The auctioneer opens each parcel by reading its identification and the pre-calculated upset price. Bidding starts at that floor. Bid increments are typically one hundred dollars, though the auctioneer controls the pace.
Once the high bid is struck down, the winner has a binding obligation and must present the registration receipt and full payment immediately. Most counties require certified checks or money orders. Personal checks and credit cards are almost never accepted. If you can’t pay on the spot, the bureau can void the sale and re-offer the property. Some counties now run auctions through online portals with electronic payment, but the same payment-timing rules apply. The bureau keeps detailed records of every bid, which become part of the official return filed with the court.
Court Confirmation and Getting the Deed
Winning the bid doesn’t make you the owner yet. Within sixty days of the sale, the Tax Claim Bureau files a Consolidated Return with the Court of Common Pleas listing every property sold, the buyer, and the price.9Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.607 The court enters a provisional order called a confirmation nisi.
From that point, the former owner and any lienholder have thirty days to file objections challenging the regularity or procedures of the sale. The bureau must also notify the former owner within thirty days of the sale that the property was sold and that they have the right to object. If no valid objections are filed within the window, the prothonotary enters a decree of absolute confirmation automatically.
After absolute confirmation, the bureau prepares a deed and records it with the Recorder of Deeds. The buyer pays Pennsylvania’s realty transfer tax, which combines a one-percent state levy with a local transfer tax that is typically also one percent, for a standard total of two percent.10Pennsylvania Department of Revenue. Realty Transfer Tax A few municipalities set different local rates, and Philadelphia’s combined rate is notably higher. The taxable value may be calculated using the state’s Common Level Ratio rather than the raw bid price, especially when the bid doesn’t reflect fair market value.11Pennsylvania Department of Revenue. Common Level Ratios Recording fees vary by county. Expect the deed by mail several weeks after the judge signs the final confirmation.
How Owners Can Stop the Sale
Property owners aren’t powerless. Under Section 501 of the Real Estate Tax Sale Law, an owner can pull the property from the sale by paying the delinquent taxes, interest, and costs before the auction.12Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.501 Payment received before July 1 of the year following the bureau’s notice of claim removes the property from the sale list entirely, before it’s even advertised. Payments made after July 1 but before the sale still stop it, though the parcel may still appear in the newspaper listing.
That matters for bidders too. Properties can vanish from the sale list right up until auction day because the owner made a last-minute payment. Don’t commit heavy due diligence to a single parcel without a backup plan.
When No One Meets the Upset Price
If no bidder meets the upset price, the property doesn’t just sit. The sale can be continued through the end of the calendar year without further advertising. At any point during or after that continuation, the bureau can petition the Court of Common Pleas to authorize a judicial sale under Sections 610 and 612, and must do so at a taxing district’s written direction.13Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.612
A judicial sale is a different animal. The court orders the property sold free and clear of all tax claims, municipal claims, mortgages, liens, charges, and estates, except separately taxed ground rents. The buyer gets absolute title. That clean title is why judicial sales tend to attract more competitive bidding and higher prices, even though the properties have already failed to sell once. If you’re looking to acquire tax-sale property without inheriting a stack of liens, this is the sale to watch for.
Federal Tax Liens: A Separate Trap
Properties encumbered by a federal tax lien carry a specific complication. When the IRS holds a lien against a property sold at a state tax sale and was entitled to notice, the United States has a 120-day redemption period starting from the sale date.14eCFR. 26 CFR 301.7425-4 – Discharge of Liens, Redemption by United States During those 120 days, the federal government can step in, match the winning bid plus interest, and take the property from the buyer.
If the sale doesn’t discharge the federal lien under state law, and a Pennsylvania upset sale generally does not, the redemption provisions don’t apply because the lien simply continues to attach to the property in the buyer’s hands. The practical result: buying a property with a federal tax lien at an upset sale means you likely inherit that lien. A title search should flag any IRS liens, and their presence is a strong reason either to walk away or to factor the payoff into your total cost.