5 Things Every Philadelphia Homeowner Needs To Know About Property Taxes
6 MIN READ
Last Updated: June 27, 2019
The following article is not legal or tax advice and may not be up to date or apply to your unique situation. Consult with an attorney or qualified CPA for details about your unique property tax situation.
Nothing is certain but death and taxes! Part of being an informed homeowner is understanding the details of how property taxes are set and paid for, where they are going, and how to take advantage of relief options if you need them.
We’ve compiled the top five things every Philadelphia homeowner and prospective home buyer needs to know about their property taxes.
1. How much are property taxes in Philadelphia?
Philadelphia property taxes are currently 1.3998% per year of your property’s assessed value. 0.6317% goes to the city, and 0.7681% goes to the school district. Anyone who owns “taxable property” has to pay them.
Who determines the assessed value? The assessed property value of your home is determined by the Office of Property Assessment and property owners are sent the most updated appraisal in the form of a Notice of Proposed Value. The assessments are based on the size and age of the property, its location and condition, and its use as a home or a business. Specifically, residential property values are determined by the characteristics listed above as well as the sale values of similar properties in the Philadelphia area.
Property taxes are due on March 31st of each year. The Philadelphia Department of Revenue usually mails real estate tax bills in December, leaving plenty of time for taxpayers to make their payments on time.
There are plenty of options available for paying your real estate tax:
You can make your real estate tax payments online using the City of Philadelphia’s Real Estate Tax Portal. All that you need is the address of the property for which you’ll be paying taxes.
You can pay by mail using a check or a money order with payment coupons from the Department of Revenues eFile/ePay site.
You can pay over the phone by calling (877) 309-3710
You can pay in person with a check or money order at an official payment center
FYI: If you pay on or before the last day of February, you can get a 1% discount on your bill!
2. You can appeal your property tax assessment if you don’t agree with it
Assessments are sent out for the next tax year in April of the year before. For example, assessments for Tax Year 2020 were sent to property owners in April of 2019. If you don’t agree with the proposed valuation, you can begin the appeal process.
Related Article | How To Appeal Your Philadelphia Property Taxes
There has been recent controversy surrounding the calculation of property assessments. Audits of the OPA found that their methodology of calculating assessments does not meet accuracy standards and is based on deficient data. The audit showed that thousands of homeowners saw huge increases in their property evaluations as a result of a flawed assessment methodology. An analysis by the The Philadelphia Inquirer and the Daily News found that over 165,000 properties had been overassessed. This led to a large influx of appeals from disgruntled taxpayers.
3. What do Philadelphia property taxes pay for?
Property taxes support the Philadelphia school district and municipal programs like EMS, construction, road maintenance, community centers and associated services, public parks, and local government staff salaries.
4. If you are having trouble paying your property taxes, there is help available.
If your real estate taxes are past due, OOPA allows you to make monthly payments towards settling that debt. Eligibility simply requires that you live in the home that you own
Payment amounts are determined either by your income level and household size
Applicants must provide proof of residency and income with their application
Learn more about the program and application here
If your real estate taxes increase by more than 15% in a given here, you may be able to postpone paying that additional amount until the property is transferred or sold. The postponed payment will make you subject to an annual interest rate and a possible lien on the property
Eligibility is based on the change in your real estate taxes and your income level. You must use the property in question as your primary residence and you can’t be delinquent on your previous real estate taxes
Applications are available online
Learn more here
Tax credits are available for active duty reserve military service members serving outside of Philadelphia. The credit excuses payment of property taxes while you are/were on active duty
Applications are due before the date of your tax bill. Your application must include proof of primary residence, certification of membership in the armed forces reserve or the National Guard and your active duty status, and all relevant identifying information
Learn more here
This program provides real estate tax relief to homeowners who saw a 50% increase in their property’s assessed value (after the Homestead exemption) in the past year. The program “locks in” the “LOOPed” assessment for as long as you remain eligible. A great example of how LOOP can help is provided on the program website
Eligibility is based upon the change in your property’s assessed value, length of ownership, the status of your current real estate taxes (you can’t be delinquent), and income limits set by the program
Applications are available online. If you are eligible, you don’t have to reapply for subsequent years
Homestead Exemption (updated amount in summer 2019 to $45,000)
The Homestead exemption is available to anybody who owns a property and lives in it as their primary residence in the Philadelphia area. Through the program, the taxable portion of your property value is reduced by a certain amount determined each year. For 2019, the amount is $45,000
You can apply either online, over the phone, or by mail. The applications, as noted on the application form, are due by September 13th to the Philadelphia department of revenue if you want to receive the Homestead tax credit in 2020. Once your application is accepted, you don’t have to reapply for the exemption from year to year as long as you remain eligible
FYI: LOOP and the Homestead Exemption can’t be applied to your tax bill at the same time. Calculate the benefits from both programs before you decide which one to take advantage of
5. You Can Get A Tax Abatement On Improvements To Your Home
If you make physical improvements on your home or on a piece of real estate in Philadelphia, you don’t have to pay taxes on the value of those improvements for ten years.
You can apply through the Office of Property Assessment’s (OPA) abatements page if you have an approved building permit and you aren’t delinquent on your real estate taxes. The OPA offers assistance to help with the application.