An online sale of liens on tax-delinquent properties has netted Philadelphia $2.1 million, city officials said Tuesday.
More than a quarter of the 865 liens that were for sale were picked up by investors. The threat of the sale alone moved owners of an additional 1,414 delinquent properties to pay $5.5 million to clear back taxes owed. And a further 506 property owners enrolled in payment plans to cover $2.2 million in unpaid taxes.
"This has been the fastest and most impactful enforcement tool that anyone in Revenue can recall," Revenue Commissioner Clarena Tolson said in a statement. "From start of process to finish was just over [seven] weeks."
The auction, completed Tuesday, was a pilot program of the Revenue Department and one in a series of efforts by the city to deal with its 98,000 tax-delinquent properties, which represent nearly one in five parcels in the city.
Only liens were for sale, not the actual properties. The new owners of the liens can recoup their investments by collecting the taxes owed on the properties.
Tolson's department notified more than 4,000 delinquent property owners they would be subject to the lien sale if their taxes were not paid.
"Many properties were later eliminated from the process because of tax-exempt status, appeals, bankruptcy," and other issues, according to Mark McDonald, Mayor Nutter's spokesman.
The city ultimately gave a list of 1,261 properties to Indianapolis-based SRI Inc., which had been contracted to run the online auction. Property owners quickly came forward to pay taxes and related liens and fees.
"Taxpayers that came in with payments through the close of business on Friday were removed from the sale," Tolson said. "In fact, we continue to have taxpayers come in to make payment on liens that did not sell."
The liens that did not sell remain on the city's books as tax-delinquent properties.
The 240 property owners whose liens were purchased will receive letters from the city explaining that their tax debt is now to be paid to the purchaser of their lien. Tax lien purchasers may later foreclose on the property if the debt is not paid.
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