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Divorce and your mortgage in Pennsylvania

Divorce and Your Mortgage in Pennsylvania The equitable-distribution buyout, the transfer tax you can avoid, and the one-year catch

In a Pennsylvania divorce, the spouse keeping the home buys out the other's share by refinancing. Pennsylvania divides marital property equitably, fair but not automatically equal. A valuable advantage: transferring the home between spouses under the divorce is exempt from Pennsylvania's high realty transfer tax, as long as you do not re-transfer it within a year. This is financing information, not legal or tax advice.

By Niko Kramer, Mortgage Loan Officer, Satori Mortgage, NMLS #2180891 Certified Divorce Lending Professional (CDLP)

Last updated: June 17, 2026

Talk to Niko Call (512) 270-2835

This is the Pennsylvania view of the divorce-and-mortgage picture. For the national mechanics, start with the Divorce and Your Mortgage pillar, and see my Pennsylvania mortgage guide.

Niko Kramer, Mortgage Loan Officer, NMLS #2180891, Certified Divorce Lending Professional
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How does a divorce home buyout work in Pennsylvania?

Pennsylvania divides marital property equitably, fairly rather than automatically in half. To keep the home, one spouse usually buys out the other's awarded share of the equity by refinancing into a new loan that pays off the old mortgage and funds the buyout. The division follows your settlement or the court, which your divorce attorney handles, not the lender.

More: How a divorce equity buyout is financed.

Does Pennsylvania split everything 50/50?

No. Pennsylvania is an equitable-distribution state under 23 Pa.C.S. 3502, so marital property is divided fairly after the court weighs the statutory factors, not automatically equally, and there is no community-property presumption. This is different from community-property states such as Texas, California, and Washington, which start from co-ownership. Your attorney handles the actual division.

Will I owe transfer tax when I buy out my spouse in Pennsylvania?

Generally no, when the transfer is pursuant to the divorce. A transfer of the home between spouses, or former spouses incident to the divorce, is exempt from Pennsylvania realty transfer tax under 72 P.S. 8102-C.3 and 61 Pa. Code 91.193. Because Pennsylvania's stacked state-plus-local tax is among the highest in the country, that exemption is a real saving, largest in Philadelphia.

The transfer-tax exemption, and the one-year catch

  • Pennsylvania imposes a 1% state realty transfer tax, and most municipalities add a local realty transfer tax, commonly another 1% for a combined rate of about 2%. Philadelphia is substantially higher (a city rate plus the 1% state).
  • A transfer of the home between spouses, or between former spouses who have since divorced where the realty was acquired by both or either spouse before or during the marriage, is excluded from Pennsylvania realty transfer tax (72 P.S. 8102-C.3; 61 Pa. Code 91.193(b)(6)). Because Pennsylvania's stacked state-plus-local transfer tax is among the most expensive in the country, this exemption is a meaningful saving on a buyout, largest in Philadelphia.
  • There is a precise catch. Under 61 Pa. Code 91.193, a subsequent transfer by the person who received the property, within one year, is taxed as if the original grantor had transferred directly to the new grantee. So if the spouse who keeps the home re-transfers it, or adds another person such as a new spouse to the deed, within a year, the realty transfer tax can become due as though the divorce transfer had been taxable.

Informational only, not tax advice. Sources: 72 P.S. 8102-C.3; 61 Pa. Code 91.193(b)(6) (excluded transfers); Pennsylvania Department of Revenue; 61 Pa. Code 91.193 (subsequent transfer within one year). The current Philadelphia combined rate is set by the city; confirm it at phila.gov. Coordinate the transfer with your attorney and the title company to keep the exemption.

Is there a catch on the transfer-tax exemption?

Yes, a one-year clawback. Under 61 Pa. Code 91.193, if the spouse who receives the home re-transfers it, or adds another person such as a new spouse to the deed, within one year, the transfer tax can become due as if the original transfer had been taxable. So keep the transfer tied to the divorce order or settlement agreement, and avoid re-transferring or adding a name within a year.

Will my property taxes go up in a Pennsylvania divorce buyout?

Not because of a basis reset, because Pennsylvania has no acquisition-value cap to begin with. Unlike California's Proposition 13 or Florida's Save Our Homes, Pennsylvania property tax runs on county assessments adjusted by the Common Level Ratio, not on a purchase-date value. So there is no low basis to preserve or lose here. Your specific assessment is the county assessment office's determination.

No Proposition 13 here, the honest version

Pennsylvania has no California Proposition 13 or Florida Save Our Homes style acquisition-value cap. Property tax runs on county assessments adjusted by the Common Level Ratio, not on a purchase-date value that a transfer would preserve or reset. So there is no low tax basis to keep or lose in a Pennsylvania divorce buyout. Property-tax specifics are for the county assessment office.

Source: Pennsylvania State Tax Equalization Board (Common Level Ratio); county assessment. Property-tax specifics are the county assessment office's; confirm with a tax advisor.

Do both of us have to sign to refinance the house in Pennsylvania?

It depends on how title is held. A home held as tenancy by the entireties, common for Pennsylvania married couples, requires both spouses to join a conveyance or mortgage; a home titled in one spouse's name alone generally does not. Confirm the title form before assuming. Either way, the timing of the refinance and the decree should be coordinated.

More: When to refinance: before or after the decree.

How do I qualify on one income in Pennsylvania?

You generally have to qualify for the new loan alone, on your own income, credit, and debt-to-income. A non-occupant co-borrower, often a parent, can help you qualify when your own numbers are tight, which matters more in the higher-cost Philadelphia suburbs. It is worth running your real numbers early, before the decree commits to a plan the financing cannot support.

More: Qualifying on one income after divorce.

Does Pennsylvania have an owelty like Texas?

No. The owelty lien is a Texas homestead mechanism. Pennsylvania handles a divorce buyout through equitable distribution and a refinance, with the transfer-tax exemption and the title-dependent joinder where they apply. So the Texas owelty guidance does not apply here; in Pennsylvania the buyout is an ordinary refinance sized to the existing balance plus the awarded share.

More: The Texas owelty lien (a Texas-only contrast).

Frequently asked questions

No. Pennsylvania is an equitable-distribution state under 23 Pa.C.S. 3502, so marital property is divided fairly after the court weighs the statutory factors, not automatically equally, and there is no community-property presumption. That contrasts with community-property states such as Texas, California, and Washington. The actual division is decided by your settlement or the court and handled by your divorce attorney, not the lender.

Generally no, when the transfer is pursuant to the divorce. A transfer of the home between spouses, or former spouses incident to the divorce where the realty was acquired before or during the marriage, is exempt from Pennsylvania realty transfer tax under 72 P.S. 8102-C.3 and 61 Pa. Code 91.193. Because Pennsylvania's combined state and local transfer tax is among the highest in the country, this exemption can be a meaningful saving, especially in Philadelphia. Confirm the specifics with a tax advisor.

Under 61 Pa. Code 91.193, if the spouse who receives the home re-transfers it, or adds another person such as a new spouse to the deed, within one year, the realty transfer tax can become due as if the original divorce transfer had been taxable. It is the detail most pages miss. To keep the exemption, keep the transfer tied to the divorce order or written settlement agreement and avoid re-transferring or adding a name within a year.

Neither, because Pennsylvania has no acquisition-value cap. Unlike California's Proposition 13 or Florida's Save Our Homes, Pennsylvania property tax runs on county assessments adjusted by the Common Level Ratio, not on a purchase-date value that a transfer would preserve or reset. So there is no low tax basis to keep or lose in a buyout here. Your specific assessment is the county assessment office's determination.

It depends on how the title is held. A home held as tenancy by the entireties, which is common for married Pennsylvania couples, requires both spouses to join a conveyance or mortgage; a home titled in one spouse's name alone generally does not. Confirm the title form before assuming either way. This is a property-title requirement to encumber the home, not a comment on whether one spouse qualifies for the loan on their own.

Related guides

Sources

Sorting out a Pennsylvania home in a divorce? Let's run your real numbers.

Tell me the rough equity, the buyout, and your income, and I'll tell you straight whether keeping the home is fundable on your own, and coordinate the refinance with your attorney and title so the transfer-tax exemption holds. No pressure, no credit pull, and no push either way.

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