Pennsylvania Commercial Real Estate Loans: Transfer Tax & C-PACE
What changes for a commercial property loan in Pennsylvania: a 2% transfer tax (4.578% in Philadelphia, 5% in Pittsburgh), court foreclosure and county C-PACE.
| What | Pennsylvania |
|---|---|
| State realty transfer tax | 1% of the price. Most municipalities and school districts add 1% between them — 2% combined. [1] |
| Philadelphia | 3.578% city tax since July 1, 2025 — 4.578% with the state's 1%. [2] |
| Pittsburgh | 5% combined: 3% city, 1% school district, 1% state (since February 1, 2020). [3] |
| Foreclosure process | Judicial. The lender brings an action in mortgage foreclosure; after judgment, the property is sold at a sheriff sale. [4] |
| C-PACE law | Act 30 of 2018. Counties, and municipalities with a development department, adopt it by resolution; Philadelphia runs its own program. [5] |
| C-PACE volume | $297 million across 30 projects, all-time through 2024 — the second-largest average project after California. [6] |
Checked 2026-09-29; sources are listed at the end of the page. Rates and rules change — your title company and closing attorney confirm the figures for a specific deal.
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Commercial property loans in Pennsylvania use the same programs as every other state — SBA 504, DSCR loans, bridge loans, bank and life-company permanent loans. What Pennsylvania changes is one of the country's heavier transfer taxes, which varies sharply by municipality, a court-run foreclosure process, and a C-PACE program adopted county by county.
The transfer tax, municipality by municipality
Pennsylvania charges a realty transfer tax of 1% of the price, and most municipalities and school districts add another 1% between them — 2% combined. The two largest cities charge far more: Philadelphia's city tax has been 3.578% since July 1, 2025, for 4.578% with the state's share, and Pittsburgh's combined rate is 5%.
Example: a $2,000,000 building bought with a $1,400,000 loan.
- At the common 2% rate: $2,000,000 × 2% = $40,000
- In Philadelphia: $2,000,000 × 4.578% = $91,560
- In Pittsburgh: $2,000,000 × 5% = $100,000
How the tax is split between buyer and seller is a term of the purchase contract — at these rates it is worth negotiating explicitly. Pennsylvania doesn't tax the mortgage, so the $1,400,000 loan adds recording fees, not a percentage; compare New York City, where the recording tax on the same loan is $39,200. The same is true on a refinance: with no tax on a new mortgage, the cost is mostly lender and title fees.
Court foreclosure
Pennsylvania forecloses only through the courts. The lender brings an action in mortgage foreclosure under the Rules of Civil Procedure; after judgment, the property is sold at a sheriff sale. The process takes longer than a trustee sale in a state like Texas, and lenders account for that in how they size loans and structure recourse — conservative LTV, attention to DSCR, and guaranties. A non-recourse loan limits the lender to the property, with carve-outs to read before you sign.
C-PACE in Pennsylvania
Pennsylvania authorized C-PACE with Act 30 of 2018. A county — or a municipality with an economic or community development department — adopts a program by resolution, so coverage depends on where the property is — check the county list before you plan on it. Philadelphia runs its own program. C-PACE finances energy-efficiency, renewable-energy and water-conservation projects on commercial, industrial and agricultural property through a voluntary special assessment, up to the full project cost.
By the C-PACE Alliance's 2024 national data, Pennsylvania has financed $297 million across 30 projects — the second-largest average project size in the country after California. The existing mortgage lender's consent is part of the process. C-PACE Desk, a BestLoanUSA site, tracks Pennsylvania counties and capital providers.
Where to start
Choose the program — SBA 504 for an owner-occupied building, a DSCR loan or permanent loan for an income property, a bridge loan for a transition — and put the municipality's transfer tax in the budget before you set the offer. Size the loan with the commercial mortgage calculator. For financing that isn't tied to real estate, the Pennsylvania business loan guide covers SBA offices and lenders by region.
Ready to compare? Start a commercial real estate loan request — one application, compared across our lender network.
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Sources: Pennsylvania Department of Revenue, Realty Transfer Tax; City of Philadelphia Department of Revenue (2025-07-28); City of Pittsburgh rate via EY Tax News; Pa. R. Civ. P. 1141–1150; Pennsylvania C-PACE (Act 30 of 2018); C-PACE Alliance, 2024 National C-PACE Program Volume Data (via C-PACE Desk, checked 2026-08-30).
The bottom line
In Pennsylvania the transfer tax is the closing cost to plan around — 2% in most places and more than twice that in Philadelphia and Pittsburgh. It doesn't touch the loan, so refinancing stays cheap, but it can decide the price you can pay. Get the municipality's combined rate first, then check whether the county has adopted C-PACE.
Commercial property by metro area in Pennsylvania
The state rules above apply everywhere in Pennsylvania. These are the local ones — county and city taxes, building mandates and programs — that change the numbers in its largest markets.
Philadelphia Philadelphia County
- Use & Occupancy Tax
- 1.21% of assessed value on real estate used for business, and the $2,000 annual exemption ended January 1, 2026 — an operating cost on top of real estate tax. [7]
- Energy benchmarking
- Commercial and multifamily buildings of 50,000 sq ft or more report energy and water use every year by June 30 (Code §9-3402). [8]
- Building tune-ups
- Non-residential buildings of 50,000 sq ft or more must certify high performance or complete a systems tune-up every five years, with first deadlines from 2026 (largest) to 2029. [9]
- C-PACE
- Authorized by City Council in 2019 and administered by the Philadelphia Energy Authority; private capital providers originate the financing. [10]
Pittsburgh Allegheny County
Harrisburg Dauphin County
- Split-rate property tax
- Harrisburg taxes land at a much higher rate than buildings (City Code ch. 5-501), so improving a site raises the city tax bill less than in a flat-rate city. [13]
- City transfer tax
- The city levies a 1% realty transfer tax (City Code ch. 5-701) on top of the state’s 1%. [14]
- C-PACE
- Dauphin County authorized C-PACE by Resolution 28-2021. [15]
Allentown Lehigh County
- Transfer tax
- 2.5% since January 1, 2026: 1% state + 1.5% city. On a $2,000,000 sale: $50,000. [16]
- Neighborhood Improvement Zone
- Downtown’s NIZ (Act 50 of 2009) sends certain state and local taxes from new development to repay the zone’s debt; every business in the zone files annual NIZ tax reports. [17]
- C-PACE
- Lehigh County adopted C-PACE in 2019, administered by the Sustainable Energy Fund, with a $10,000 minimum project. [18]
Commercial loan rates and terms in Pennsylvania
Rates and leverage come from the lender, the property and the borrower, so they are the same national ranges in Pennsylvania as elsewhere — what changes here are the closing costs and rules in the table above. Typical terms as of September 2026:
| Program | Rate | Max LTV / LTC | Term |
|---|---|---|---|
| Bank / credit union | 6.5–8% | 65–75% (80% multifamily) | 5–10 yr |
| SBA 504 | 6.25–7.25% | Up to 90% | 10–25 yr |
| SBA 7(a) | 8.5–11.5% | Up to 90% | Up to 25 yr |
| DSCR | 6.75–8.75% | Up to 75–80% | 5–30 yr |
| CMBS | 7–8% | Up to 75% | 5–10 yr |
| Bridge | 6.25–8.25% | 65–80% | 12–36 mo |
| Construction | 6.75–10.5% | 65–80% LTC | 12–24 mo |
How each range is built: commercial real estate loan rates by type.
Pennsylvania commercial real estate loan FAQ
What are commercial mortgage rates in Pennsylvania?
Commercial lenders price a loan on the property and the borrower rather than the state, so Pennsylvania rates follow national ranges: about 6.5–8% for a bank loan, 6.25–7.25% for SBA 504, 6.75–8.75% for a DSCR loan and 6.25–8.25% for a bank or debt-fund bridge loan (benchmarks as of September 2026).
How much down payment do I need for a commercial property in Pennsylvania?
Typically 25–35% for a bank loan and 20–25% for a DSCR loan. An owner-occupied building can qualify for SBA 504 with 10% down (15% for a business under two years old or a special-purpose building, 20% if both).
What is the realty transfer tax on a commercial sale in Pennsylvania?
1% to the state, and most municipalities and school districts add 1% between them — 2% combined. Philadelphia’s combined rate is 4.578% and Pittsburgh’s is 5%.
Does Pennsylvania tax the mortgage?
No. Recording the loan costs a recording fee, not a percentage tax, so a refinance mostly costs lender and title fees.
Is C-PACE available in Pennsylvania?
Where the county has adopted it. Pennsylvania authorized C-PACE with Act 30 of 2018; counties, and municipalities with a development department, adopt it by resolution, and Philadelphia runs its own program.
Sources
- Pennsylvania Dept. of Revenue
- City of Philadelphia, Dept. of Revenue
- EY Tax News — City of Pittsburgh
- Pa. R. Civ. P. 1141–1150
- Pennsylvania C-PACE
- C-PACE Alliance 2024 data, via C-PACE Desk
- City of Philadelphia — Use and Occupancy Tax
- City of Philadelphia — Building Energy Benchmarking
- City of Philadelphia — BEPP compliance deadlines
- Philadelphia Energy Authority — Commercial PACE
- City of Pittsburgh — Building Benchmarking
- Allegheny County — C-PACE
- City of Harrisburg Code ch. 5-501
- City of Harrisburg Code ch. 5-701
- Dauphin County — Resolution 28-2021
- City of Allentown — Realty transfer tax increase (2026)
- Pennsylvania Dept. of Revenue — NIZ
- Pennsylvania C-PACE Counties — Lehigh County
Checked 2026-09-29.
Run the numbers
- DSCR Calculator Calculate your Debt Service Coverage Ratio instantly. See if your property qualifies for CRE financing and which loan programs are available to you.
- LTV Calculator Calculate your Loan-to-Value ratio or find the maximum loan amount for your commercial property. See which programs you qualify for at your LTV.
- SBA 504 Loan Calculator Estimate your SBA 504 loan structure — see the three-part split (borrower, CDC, bank), monthly payments for each portion, and total project financing.
Keep reading
- Pennsylvania Business Loans: SBA, State Programs & Lenders Pennsylvania has two of the most distinct business markets in the country — Philadelphia's dense urban economy and Pittsburgh's tech and healthcare resurgence — plus a vast rural and manufacturing interior. Here's how to navigate financing across the state.
- Arizona Commercial Real Estate Loans: Trustee Sales & Deficiency What changes for a commercial property loan in Arizona: no new transfer taxes, flat $30 recording, 91-day trustee sales and a 90-day deficiency deadline.
- California Commercial Real Estate Loans: Taxes, Prop 13 & C-PACE What changes for a commercial property loan in California: city transfer taxes, a Prop 13 reset at purchase, trustee-sale foreclosure and the largest C-PACE market.
- Colorado Commercial Real Estate Loans: Public Trustee & C-PACE What changes for a commercial property loan in Colorado: a 0.01% deed fee and no mortgage tax, public trustee foreclosure with a court order, statewide C-PACE.