August 16, 2024

Save on Property Taxes: A Guide to Reducing Your Tax Bill in Philly

On August 5, 2024, Mayor Cherelle Parker announced that 580,000 properties in Philadelphia will experience a property tax increase of more than 50% in 2025. According to our estimates, 100% of homeowners are unhappy with this news. If you believe your new tax bill is unfair, there are steps you can take to appeal it. Let’s explore what can be done to potentially reduce your property tax burden and ensure you’re paying a fair amount:

PROPERTY TAX CALCULATION

AND APPEAL PROCESS

Understanding how your property taxes are calculated can help you navigate any discrepancies. In Philadelphia, your property taxes are determined by multiplying the assessed value of your home by the current tax rate, which is 1.3998%. The city determines your home’s value based on factors like market trends, neighborhood, and your home’s size and condition. Since these assessments are done in bulk, they might not always be accurate, potentially leading to an overvaluation of your property. If you believe there’s an error in your property’s assessed value, you have options to appeal:

First-Level Review (FLR): This informal process allows you to request that the Office of Property Assessment (OPA) reassess your property’s value.
Board of Revision of Taxes (BRT) Appeal: If the FLR doesn’t resolve the issue, or if you prefer to bypass it, you can file a formal appeal with the BRT. The deadline for this appeal is the first Monday in October. If you miss this deadline, you can request a late appeal, but you’ll need to provide a reason for the delay.

You can skip the First-Level Review and go directly to the BRT appeal if you want to expedite the process. However, keep in mind that the BRT appeal is more complex, requiring you to attend a hearing, either in person or online. Having a professional represent you during this hearing can improve your chances of success.

Appeals can be submitted by mail, in person, or via email. Be sure to include supporting evidence such as recent sales in your area, an appraisal, or photos of your property. If the BRT’s decision is still unsatisfactory, you can pursue further review in court.

KEY EVIDENCE TO COLLECT

To strengthen your appeal, consider gathering the following types of evidence:

Comparable Sales Data! Gather information on recent sales of similar properties in your neighborhood. If homes like yours have sold for less, it could indicate that your assessed value is higher than the actual market value.
Professional Appraisal! A professional appraisal from a licensed expert can add significant credibility to your case, providing an independent valuation of your property.
Photographs of Your Property’s Current Condition! Visual evidence of any defects or issues, such as cracks, sinking foundations, roof leaks, water damage, or mold growth, can support your claim that the property is worth less than assessed.
Evidence of Errors in the Assessment! Look for inaccuracies in the city’s assessment, such as incorrect square footage or the number of rooms. Correcting these errors can result in a more accurate valuation.
Market Analysis or Real Estate Agent Report! A report from a real estate agent that includes an analysis of current market trends can highlight discrepancies between your assessment and the actual market conditions.
Income and Expense Statements (for Income-Generating Properties)! For rental or commercial properties, financial records showing income and expenses can argue that your property’s value should reflect its income potential.
Neighborhood Changes! If there have been significant changes in your neighborhood, like new developments, zoning changes, or shifts in the local economy, this information can be relevant to your appeal and may help lower your property’s assessed value.

If you win your appeal after paying your property taxes, you’ll either get a refund for the difference or a credit toward next year’s taxes. The appeal process usually takes about 3 to 6 months, but it can vary depending on how busy the Board of Revision of Taxes (BRT) is. It’s a good idea to start the appeal as soon as possible to ensure everything is resolved in a timely manner.

““For properties where they’re increases in values and in taxes, we know that those increases can present a hardship. We’ve expanded our relief programs and we’re aggressively promoting those relief programs to ensure that as many people as possible enroll.””

— Rob Dubow, Director of Finance

AVAILABLE PROGRAMS

TO CUT YOUR TAX BILL

Homestead Exemption: This program can reduce the taxable value of your property by up to $80,000, potentially lowering your property tax bill. For example, if your property’s assessed value is $400,000, the Homestead Exemption would reduce the taxable value to $320,000. You would then pay property tax based on this reduced value, not the original assessed value. The tax rate 1.3998%, would be applied to the reduced value. This exemption is available to homeowners who use the property as their primary residence.

Longtime Owner Occupants Program (LOOP): If you've owned and lived in your home for more than 10 years in Philadelphia and have experienced significant increases in your property assessment, you may qualify for LOOP. This program provides relief by capping the amount by which your property tax can increase each year. Essentially, it limits the annual increase in your property taxes, helping to manage the impact of rising assessments on long-term homeowners.

Senior Citizen Real Estate Tax Freeze: If you're 65 or older (or 50 and the widow of someone who was 65 or older), you may be eligible for a tax freeze, which means your property taxes won't increase even if your home’s assessed value goes up. There are income limits for this program—$33,500 or less for a single individual and $41,500 for a married couple.

Owner-Occupied Real Estate Tax Payment Agreement (OOPA): This program is designed for homeowners who reside in their property and are behind on their real estate taxes. It allows you to pay past-due taxes through affordable monthly payments. OOPA can be especially beneficial if you need additional time to catch up on overdue taxes without facing immediate financial strain.

P.S. At Venture Philly Group, we recognize the necessity of the recent tax increase and the value it will bring to our community. However, we also understand the importance of addressing each homeowner's situation individually. For some, the recent 50% tax increase may be difficult to manage, and as we've mentioned before, large-scale property assessments can sometimes lead to discrepancies in home values. The purpose of this article isn’t just to help our clients pay less but to ensure that what they’re paying is fair. If you have any concerns or need personalized real estate advice, don’t hesitate to contact us today.