Around the Block: 5/13/2022

So last week I wrote about the city announcement that Philly Tax Assessments are going up after a several year hiatus. Well on Monday they revealed the 2023 taxes for every property in the city.

In last week’s piece, I stated: “Under the [city’s Actual Value Initiative], theoretically, a Philadelphia property’s tax assessment should be at or around the amount of its fair market value, which (again theoretically) should be similar to a recent sale price of that property, if applicable. I say theoretically (twice) because anyone who is familiar with Philly real estate assessments knows that while they are supposed to be based on ‘actual value,’ there is a significant level of arbitrariness as well.”

Well, some things never change. Because in a preliminary review of the city’s 2023 assessments, what I have found is utter arbitrariness. One quick example—one home that has a fair market value of over $1,000,000 is assessed under $700,000, which is more than $250,000 less than the most recent sale of a similar home on that same block. About three blocks away in the same neighborhood, a home with a fair market value of $900,000 is assessed at $970,000.

So, the $1M+ house is assessed $300,000+ too low and the $900,000 is assessed $70,000+ too high. This means that the home worth $100,000 less is paying almost $4,000 more in taxes. This is just one example out of many. And this is far from the most egregious. Really far. The level of arbitrariness is shocking even by Philly’s dubious standards.

I have no doubt many of you have already reviewed your 2023 taxes online, but for those that haven’t (or who want to research other city properties), the 2023 tax assessments for all Philly properties can be found on the city’s Office of Property Assessment website. Just plug in the address and you will find the proposed 2023 taxes as well as a history of the previous eight or so years for comparison. You will see how the taxes are broken up (land vs improvements) and whether the property has a Tax Abatement, Homestead Exemption (i.e., if it states $45,000), or LOOP Exemption.

To determine the tax, the formula is: (Taxable Land + Taxable Improvement) x .013998 = Annual Tax.

The Philly tax rate is 1.3998% of the assessed value, which is where that multiplier comes in.

IMPORTANT: If you are an owner occupant of your Philadelphia home and your Exempt Improvement is $0, then you are missing the Homestead Exemption, which you are entitled to, and which will save you $630 per year (starting in 2023). If you are entitled to and do not have the Homestead Exemption, and you want to reduce your tax bill by $630, then go to this phila.gov page and apply for the Homestead Exemption. It should take about five minutes.

So, a lot of stuff here. I would love to hear any tax assessment comments and questions you have.

Please keep them coming.

Have a great weekend!

Thanks,

Jeff