If you own property in Philadelphia, you should have received a notice from the Office of Property Assessment (OPA) by now informing you of the new assessed value for your property. If you have not received the notice yet, you can find the new assessed value for your property online at property.phila.gov. Be prepared to be shocked. The property value of your property likely increased by a significant amount. This increase will directly translate into a much larger property tax bill in March and all future tax years. According to the OPA, the aggregate value of all properties in Philadelphia rose by approximately 21% since 2020. This dramatic rise is attributable to the City’s strong real estate market.
The OPA increased the assessed property values by looking at certain factors. For residential properties, the OPA specifically reviewed the size and age of the property, the property’s location and condition, and recent sales of comparable properties in the area. For commercial and large multi-family properties the OPA used slightly different factors such as the recent sales of comparable properties, cost of operating the property, income generated by the property, and cost of construction. The OPA obtained this information through field inspections, aerial photography, data from other City departments such as permits and deeds, and commercial sources such as property listings and sales data.
To help mitigate the impact of the property tax increase, certain tax relief programs were expanded. For example, the residential property tax exemption under the Homestead Exemption was increased from $45,000 up to $80,000. This increased exemption is effective for 2023 and thereafter. As a result, $80,000 of your property’s assessed value will be exempt from property tax. It is estimated that this exemption increase will save most homeowners about $1,119 in property tax annually. The Senior Citizen Real Estate Tax Freeze Program was also expanded to allow senior citizens who missed enrollment to currently enroll in the program and freeze their property value at the amount it would have been when they first qualified for the program. However, these tax relief programs will not help commercial property owners.
If you believe the reassessed value of your property is incorrect, you can challenge the reassessed value by filing an appeal with the Board of Revision of Taxes (Board). The deadline for filing this appeal is October 3, 2022. Keep in mind, this is a firm deadline. No appeals will be accepted by the Board after this date. If you are interested in challenging the reassessed value of your property, you should consult your tax attorney or legal advisor immediately to assess your case. The deadline is right around the corner.