DSCR Loans in Pennsylvania: Transfer Tax, Philadelphia Licenses, and Lease Rules

The Pennsylvania Department of Revenue charges a state realty transfer tax equal to 1 cent on each dollar of value when real estate changes hands by deed. County recorders of deeds collect it, often with a local transfer tax. The state's Local Tax Enabling Act caps what most towns and their school districts can add at one more cent between them, so 2 cents is a common starting point.

Two cities sit well above that. The City of Philadelphia lists a combined 4.578 cents on each dollar of the sale price or assessed value, which is the state cent plus the city's 3.578. Allegheny County shows a 5 cent total inside the City of Pittsburgh: 1 for the state, 3 for the city, and 1 for the Pittsburgh School District.

None of this changes the DSCR ratio, which compares rent with the monthly payment. It does change the cash you bring to closing, so it goes into my first estimate.

Pennsylvania holds the buyer and the seller jointly and severally liable for the state tax. Philadelphia's Department of Revenue says the city tax is usually split evenly, but that split is custom rather than law, and the city can collect the full amount from either party.

So the split you negotiate lives in the sales agreement. Read that paragraph before you sign, not at the closing table.

Yes. Section 9-3902 of the Philadelphia Code requires the owner of a dwelling unit let for occupancy to obtain a Rental License, and it says no person shall collect rent on a property that needs one unless a valid license has been issued.

One license can cover a whole building with several units, as long as it lists each unit. A property with more than one building needs a license for each building, and the city ties renewal to current city taxes, no open violations, and the lead safety rules.

For a DSCR file, rent you can't legally collect is rent I can't count. On a Philadelphia purchase, I ask whether the seller's license is current and when you plan to apply for yours.

Usually not as an investor property in a residential neighborhood. Philadelphia splits short term rentals into two zoning uses. Limited lodging is for a home with a primary resident, and visitor accommodation is for a home without one.

An investor rental with no one living there falls under visitor accommodation, which needs its own zoning permit and a Rental License with a hotel designation. The city's planning FAQ says the zoning code does not permit visitor accommodations in lower density residential neighborhoods, and the City Controller's June 2026 review notes that a denied permit has to be appealed to the Zoning Board of Adjustment within 30 days.

So for most Philadelphia investor buys, I build the DSCR numbers on a 12 month lease. If your property has a visitor accommodation permit, send it and we'll look.

The Landlord and Tenant Act of 1951 caps the security deposit at two months' rent during the first year of a lease. From the second year on, including renewals, the cap drops to one month's rent. Within 30 days of the lease ending or the unit being surrendered, the landlord owes a written list of damages along with the balance of the deposit.

Notice to quit depends on the reason. For unpaid rent, the notice gives the tenant 10 days. When a lease of one year or less, or one with no set term, ends, the tenant gets 15 days, and a lease longer than a year gets 30.

I read those terms in the lease on a refinance. A deposit above the cap is a small thing to fix before an underwriter asks about it.

In Pennsylvania the municipality matters as much as the street. This list keeps an estimate honest.

• The address, including the municipality and school district
• The sales agreement, with the transfer tax paragraph
• A signed lease or a rent estimate
• For Philadelphia, the Rental License number
• Last year's property tax bill and an insurance quote

Residential home loans in Maine and Florida. DSCR loans in 37 states. The page limits these loans to business purpose financing on rentals the owner won't occupy, from 1 to 9 units, and Pennsylvania's row reads "No" under LLC or Corp vesting. A mobile or manufactured home won't qualify.