August 05, 2024
Thom Carroll/for PhillyVoice
Philadelphia's Office of Property Assessment will be mailing notices of reassessed home values to residents this week. The city says the average homeowner will pay about $330 more when they file property taxes in 2025.
The average Philadelphia home owner will pay about $330 more in property taxes in 2025 as a result of the city's latest reassessment of real estate values, the first to take place in two years.
Mayor Cherelle Parker announced the completion of the citywide reassessment on Monday ahead of notices being mailed to property owners this week. The new values also will be posted online for home owners to look up their addresses around the same time, the mayor's office said.
MORE: As Philly endures another heat wave, has this summer been the hottest in recent history?
Many homeowners will be eligible to take advantage of city programs that help them save on their tax bills or freeze payments due to financial hardships.
“The purpose of the revaluations, which are required by state law, is to make sure all properties are valued fairly, equitably and accurately,” Parker said. “The Office of Property Assessment has done its job. Now, we are expanding tax relief programs for all Philadelphia homeowners, including for our city’s most vulnerable residents.”
The new home values will take effect Jan. 1. Property taxes based on these new values will be due March 31, 2025.
When the city conducts reassessments, it appraises the values of more than 580,000 residential, commercial, industrial and institutional properties in Philadelphia. Recent reassessments in the city have followed a period of auditing and reform within OPA, which had been charged with modernizing its property valuation formula to be more equitable and consistent.
The last reassessment in 2022 happened after real estate values had boomed during the COVID-19 pandemic. At the time, the city said the total value of all property types in the city had risen about 21% since the last reassessment before that in 2019. Residential properties in the city — including single-family homes and small apartments with two to four units — saw their aggregate assessed value rise by approximately 31%. Most of the increased citywide valuation was driven by residential properties.
When reassessing properties, OPA takes into account factors such the size, style and age of a property; the location and condition of a property; and recent sales of similar properties in the area. The office relies on a combination of field inspections, aerial photography, data from other city departments and commercial sources such as property listings and sales data.
Philadelphia real estate revenue is divided between the city and the School District of Philadelphia, whose share of the split has been increased by 1% to 56% for next year's taxes. Between rising property values and the higher share, the city said its schools will get approximately $240 million in new revenue over the next five years.
The most widely used city program to reduce property tax bills is the homestead exemption, which reduced the assessed value of homes that serve as owners' primary residences. This year, the city increased that amount from $80,000 to $100,000. It was last increased from $45,000 to $80,000 in July 2022 after the last reassessment.
Home owners can apply for the homestead exemption at the new amount by Dec. 1. Those who have mortgages or are delinquent on their taxes are eligible to apply. Owners who have homes with 10-year residential tax abatements are not eligible for the homestead exemption unless they remove their abatements.
Early property tax filers are advised to apply for the homestead exemption by Sept. 13 to see their approval reflected in an adjusted bill for the coming tax year. Those approved after that date will get a second bill that shows the adjusted amount.
The increased homestead exemption is expected to save about $1,399 in property taxes for most home owners next year, city officials said.
The city also introduced a new low-income tax freeze program that will be open to individual home owners who make less than $33,500 per year and married home owners who earn less than $41,500 combined per year. Those who quality will have their tax bills frozen at the amount from the prior year. The city is developing an application for the program that's expected to be available this fall.
All senior citizens and income-qualified home owners also are eligible to pay their property taxes in monthly installments if they are approved for that program.
The city's Longtime Owner Occupants Program (LOOP) also enables home owners who have lived at their properties for at least 10 years to potentially qualify for reduced tax bills if they have previously increased by large amounts from past reassessments. This includes increases of 50% or more from one year to another or 75% or more in a five-year period. The program is designed to protect longtime residents in gentrifying areas that have seen spikes in real estate values.
Property owners who want to dispute reassessed values can do so by requesting a First Level Review from the OPA. The form to make this request is included with mailed notices of valuation. This process allows OPA to take another look at a property to see whether it was incorrectly revalued.
First Level Reviews may be sought when a property owner believes the market value or characteristics of the property are at odds with the assessment. They may also be requested if an assessment appears inconsistent with values given to comparable properties, or if an assessment failed to account for a homestead exemption or an abatement. Reviews are not granted due to financial impact or the rate of change of a property's assessed value.
Property owners who request First Level Reviews are encouraged to include relevant photos or recent home appraisals in their applications to OPA.
To request a formal appeal of property reassessment, owners may file to have their properties reviewed by the Board of Revision of Taxes.
The deadline to request First Level Reviews and to file a formal appeal is Oct. 7.
