Philly Leader

Last week the Philadelphia Office of Property Assessment posted the reassessments of the city’s properties, showing that the aggregate value of properties increased by about 21% since tax year 2020.

In response, Philadelphia Mayor Jim Kenney (D) has various proposals to assist homeowners.

According to the City of Philadelphia website, the values of more than 580,000 residential, commercial, industrial and institutional properties will take effect in tax year 2023. The increases in aggregate values show that there has been a strong real estate market in the city of Philadelphia. In an effort to reduce the possible impact that rising values could have on city residents, Kenney has proposed a rent relief measure and a reduction in the wage tax. 

“Growing property values reflect well on Philadelphia being a place of choice and represent an opportunity to build wealth for some,” Kenney said, according to the City of Philadelphia website. “But homeowners deserve protections, which is why I am proposing $200 million in new homeowner and rent relief over five years.” 

When factoring in collection costs and appeals, the 21% increase will lead to additional property tax revenues of $92 million in fiscal year 2023 to the General Fund, as well as $460 million for the Philadelphia General Fund between fiscal years 2023 and 2027.

The Homestead Exemption has been proposed by Kenney, which would reduce the taxable part of a primary residential property assessed value, would be increased to $65,000. It is currently $45,000, and homeowners who are now in the program will be able to see the change automatically without reapplying. Most homeowners will save at least $900 on their real estate tax bill.

Also proposed by Kenney is the Longtime Owner Occupants Program (LOOP), which includes a proposed increase of 20% of funds. The program is income-based and for homeowners who have been in their home for at least 10 years while experiencing a large increase to their assessment. The total amount of funds in a fiscal year would go from $25 million to $30 million.

Kenney also proposed the allocation of $40 million over a five-year period to enhance all relief programs, while increasing outreach to homeowners and work with the City Council on the use of funds. It also helps with participation in the Senior Citizen Tax Freeze program.

The mayor suggested that $260 million of the $460 million anticipated property tax revenues should be used to offset reductions in the wage tax. The plan involves the residential rate being reduced to 3.7% over two years, from 3.8398%. The nonresidential rate would go down to 3.44% from 3.4481%. The wage tax rates would be the lowest the city has seen since 1976.

Measures taken by Kenney are so that revenues that result from new assessments are returned to the taxpayers.