Don’t Put Your Home at Risk
Know the Facts about Tax Delinquency
TAX ISSUES FAQ
Laura R. Mintzer
Senior Legal Advocate
Subsisting on limited fixed incomes and often
barely able to meet the most basic expenses, senior citizens may
fall behind in their real estate tax payments. Many of these
people have maintained homes and paid their bills all their
lives. Now they have difficulty doing so because of low
retirement incomes. A notice of tax delinquency arrives from
the City, but food, utilities and home repairs may seem more
essential.
The Tax Lien Sale of 1997
In 1997, thousands of Philadelphians who owed real
estate taxes for tax year 1996 and prior were notified that
their accounts had been transferred and sold to Philadelphia
Authority for Industrial Development (PAID), an agency of the
Commonwealth of Pennsylvania created in 1967. PAID then
assigned these tax claims to the First Union National Bank as
Trustee and engaged three firms (servicers) to collect and
otherwise service these tax claims. These servicers are Capital
Asset Research Corporation, Breen Capital Services Corporation
and Linebarger Goggan Blair & Sampson, LLP.
Since then, the SeniorLAW Center has been contacted
by dozens of seniors who cannot afford the delinquent tax
repayment requirements and were faced with the possibility of
losing their homes to sheriff sale.
Don’t Wait to Be Sued
If you have received notices from one of these firms
or from the City of Philadelphia’s Department of Revenue stating
that action is being taken to collect your delinquent real
estate taxes, we urge you to contact our offices and not wait to
be sued in court. If you wait until a lawsuit is filed, you
will be responsible for expensive court costs in addition to the
taxes and interest and penalties. These costs may include
Sheriff’s fees, property inspection costs and sizeable
attorney’s fees.
Further, when you read the notices or court
documents you may not have a sense of how far along your account
is in the court process. The closer your case is to the point
of Sheriff Sale, the more difficult it may be for our office to
halt the process and attempt to work out a repayment agreement
that you can afford.
Will Notices in Another Name Affect Your
House?
Yes. Even if the owner(s) of record (person(s))
named on the deed) no longer live(s) there, the property taxes
must be paid.
If you are receiving tax notices in someone else’s
name, but about your residence, whether or not the named
person is still alive, you must respond if you do not want to
risk losing that property in Sheriff Sale. This also applies to
the annual tax notices. It is unwise to ignore any
notices about you residence from the City or the tax claim
servicers.
Further, if you are a tenant living in a property
listed for Sheriff Sale which you would consider buying if
mortgage money were available, you may wish to call the
Philadelphia Housing Development Corporation at 215-448-3139 and
ask about their TOPSS Program (Tenant – Occupied Properties at
Sheriff Sale).
Real Estate Tax Facts for Homeowners:
When are you billed and when must you pay?
Generally, you will receive your
current tax bill in mid-December for the upcoming year (i.e.
December 2007 for tax year 2008). Your taxes are due by March
31 of the current tax year. Full or partial payments before
February 28 are discounted by 1%. If not paid, additional
charges (“additions”) will accrue on the principal amount
beginning April 1 through December 31. The next day, January 1,
those “additions” are added into your principal balance. That
unpaid amount is then recorded as delinquent and a lien for the
total delinquent amount is filed against the property.
Are There Special Payment Plans and/or
Benefits for Low-Income Seniors?
Yes, if you are 65 years of age or
older or the 50 years or older widow/widower of a spouse who was
at least 65 as the time of death and you are income-eligible.
Both of the following programs apply to your primary
residence only:
1.
A “Special
Real Estate Tax Freeze Provision” went into effect on
January 1, 1997 and applies to those whose tax assessment have
increased. For more information talk to a Revenue Customer
Service Representative at 215-686-6442 or go to their office at
the Municipal Services Building, Concourse Level, 15th
and JFK Blvd. Seniors must apply for this relief every year.
2.
To
qualify for the Real Estate Installment Plan, seniors
must meet income guidelines and apply each year 9 – 20 monthly
payment plans are available with a $20 lien charge applied to
that account.
3.
Certain senior citizens may be eligible for the Real Estate
Tax Rebate offered by the Commonwealth of Pennsylvania. The
amount of tax refunded will depend on your income and the amount
of real estate tax you have paid. You can order a rebate form
by calling 1-800-362-2050, 24 hours a day. Note however, that
you may jeopardize this rebate benefit if you enter into the
afore-mentioned Real Estate Installment Plan.
What to Consider when Selling or
Transferring Real Estate
A Real Estate Transfer Tax is levied by the City at
the rate of 3% of the sale price or fair market value when real
estate located in the City is sold or transferred. The
Commonwealth of Pennsylvania charges an additional tax of 1%.
The tax must be paid when the new deed is filed at the
Department of Records in Room 154 of City Hall. The transfer
may be exempt if it is between certain family members. Property
received through a will is also exempt. To learn more contact
the Compliance Development Section of the Department of Revenue
at 215-686-6614.
Don’t Wait, Don’t Assume, Don’t Be Afraid
At the SeniorLAW Center, we hear so many reasons for
tax delinquency problems: “I was afraid to open the bill”; “I
didn’t know I had to keep paying once my mortgage was paid off”;
I didn’t know I had to pay taxes on a vacant lot”; “I saw the
amount and knew I couldn’t afford to pay”; “My name isn’t on the
deed, why should I pay the taxes?” Unfortunately,
inaction often leads to crisis.
Don’t wait. Call SeniorLAW Center with questions.
We can either answer them or we know who can.
SeniorLAW Center assists many elders with
legal problems concerning their homes.
Elders can discuss a legal problem or get
information by calling SeniorLAW Center’s telephone intake line
(215) 988-1242 Mondays through Fridays, 9 a.m. – 1 p.m., or
coming to our center city offices at 100 S. Broad Street, Suite
# 18101, Mondays through Wednesdays, 9 a.m. – 1 p.m. Some
issues can be addressed initially over the phone. For general
information, please call us at (215) 988-1244 or visit our
website at www.seniorlawcenter.org.
TAX
ISSUES FAQ
