Pennsylvania Inheritance Tax on Real Estate (2026) + Selling an Inherited House
Pennsylvania Inheritance Tax Rates (2026)
Pennsylvania imposes an inheritance tax on assets transferred to beneficiaries at death. The rate depends on the relationship between the deceased and the beneficiary:
| Relationship to Deceased | PA Inheritance Tax Rate |
|---|---|
| Surviving spouse | 0% |
| Children / grandchildren (lineal heirs) | 4.5% |
| Siblings | 12% |
| All other heirs | 15% |
| Charitable organizations | 0% |
Deadlines + the 5% Early-Payment Discount
Pennsylvania inheritance tax is due within 9 months of the date of death. However, if you pay within 3 months of death, you receive a 5% discount on the tax owed.
Discount Example (Quick Math)
If you inherit a property valued at $150,000 as a sibling (12% rate), your tax is $18,000. Pay within 3 months and you save 5% — reducing the bill to $17,100. On larger estates the early-payment discount is meaningful.
What Value Is Taxed (and What Can Reduce It)
The taxable value of real estate is generally the fair market value at the date of death. However, certain deductions can reduce the taxable estate:
- Outstanding mortgage balance on the property
- Documented debts of the deceased
- Medical expenses paid from the estate
- Funeral and burial costs
- Estate administration expenses (attorney fees, executor fees)
Practical Example With a Mortgage
Property fair market value: $200,000. Outstanding mortgage: $75,000. Taxable value: $125,000. At 4.5% (lineal heir), tax owed: $5,625 — not $9,000.
Selling an Inherited House in Pennsylvania
Once you've established your role as executor or heir with legal authority to sell, you have several options for selling an inherited property in Pennsylvania.
List traditionally with an agent
Most appropriate for move-in-ready properties. Requires time, potential repairs, and agent commission.
Sell for cash as-is
Fastest path. No repairs, no showings, close in days. Proceeds can be used to pay inheritance tax promptly.
Rent it out
Generates income but requires management, maintenance, and accepting ongoing landlord responsibilities.
Step-Up in Basis + Capital Gains (Common Confusion)
When you inherit real estate, you generally receive a “step-up” in cost basis to the fair market value at the date of death. This means you typically do not owe capital gains on appreciation that occurred before the death.
Simple Step-Up Example
Parent bought home in 1985 for $40,000. At death in 2024, home is worth $180,000. Your stepped-up basis is $180,000. If you sell immediately for $185,000, you only owe capital gains on $5,000 — not the $140,000 of appreciation during the parent's lifetime.
Want to Sell the Inherited House Fast (As-Is) in Pennsylvania?
House Buying Solutions specializes in purchasing inherited properties across Northeast and Central Pennsylvania. We understand the unique pressures of estate sales — inheritance tax deadlines, multiple heirs, properties in unknown condition — and we make the process as straightforward as possible.
FAQ
Where do I verify Pennsylvania inheritance tax rates and deadlines?
The Pennsylvania Department of Revenue publishes current rates and forms at revenue.pa.gov. Your county Register of Wills office is also a reliable source for local filing procedures.
Is Pennsylvania still one of the only states with inheritance tax?
Yes. As of 2026, only six states still impose an inheritance tax: Pennsylvania, Iowa, Kentucky, Maryland, Nebraska, and New Jersey. Pennsylvania's rates vary by relationship to the deceased.
Do I have to pay inheritance tax before I can sell the inherited house?
Not necessarily — but a tax lien can attach to the property if tax goes unpaid. Most estate attorneys coordinate the tax payment with the sale proceeds at closing. Discuss timing with your attorney and title company.
Can a mortgage and other bills reduce inheritance tax?
Yes. Debts of the decedent — including mortgages, medical bills, and estate administration expenses — can reduce the taxable value of the estate before the tax is calculated.
What changed in 2026 (estate settlement law update)?
Pennsylvania made administrative changes to estate settlement procedures in 2026. Consult a Pennsylvania estate attorney for current guidance on any procedural updates that affect your situation.
Sell an Inherited PA Property
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