How Secure is Your Pennsylvania Real Property Tax Exemption?

In late January, County Executive Richard Fitzgerald announced that thousands of tax-exempt properties in the county will have their exemptions reviewed in 2013. According to Fitzgerald, each owner of tax-exempt property within Allegheny County will have to establish that the property continues to qualify for exemption.

Nonprofit organizations that own real property located in Allegheny County should prepare their responses carefully, because the county may claim that recent Pennsylvania case law affected the standards for nonprofit organizations claiming exemption from real property taxes as “institutions of purely public charity.” Nonprofit organizations qualifying for exemption from real property taxes on other bases, such as houses of worship, nonprofit cemeteries, and most veterans’ organizations, were not directly affected by the recent court decision, but will also be scrutinized.

The Pennsylvania Constitution and Property Tax Exemption -

The Pennsylvania Constitution requires that all taxes must be uniform as applied to each class of subjects. However, the Constitution gives the Pennsylvania General Assembly the authority to exempt from tax five categories of organizations: (a) places of regularly occurring religious worship; (b) nonprofit cemeteries; (c) publicly owned property that is regularly used for public purposes; (d) property owned and occupied by a veterans’ organization and used for benevolent, charitable, or patriotic purposes; and (e) property owned by an “institution of purely public charity,” but only that portion of the real property which is actually and regularly used for the purposes of the institution.

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Topics:  Property Tax, Purely Public Charity Act, Tax Exemptions

Published In: Constitutional Law Updates, Nonprofits Updates, Commercial Real Estate Updates, Residential Real Estate Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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