Philadelphia’s new real estate assessment is finished. As Hall Monitor reported last week, not everyone received a letter stating this year’s tax burden. If the letter hasn’t reached you, don’t wait; check the Office of Property Assessment’s web page to see what the nameless, unaccountable appraiser says your home is worth. Enter your address and see if your real estate taxes have increased, if you are receiving the homestead exemption, which reduces the rising real estate taxes by $1,400, or if you are in any other program.
The page doesn’t tell you what your real estate taxes are and what they have been. You can either multiply the assessments listed, or if you have the homestead exemption, reduce the assessment by $100,000 and then multiply by 1.3999%. You can also check the city’s records by clicking the “View the Tax Balance” box and then clicking “View Period Balance.”
On the same page, below the “View Box” is a link “Apply for Real Estate Tax Assistance.” Of all the city’s web pages, this link provides the best overview of all the programs the city offers. It links to a real estate assistance application, which lets you apply for all the different programs. All except the homestead exemption have income and other limitations.
Some, like the Longtime Owner Occupant Program (LOOP), have guidelines that are very difficult to understand: “You may be eligible if your property assessment increased by at least 50% over last year, or by at least 75% over the past five years. You must also meet other requirements, such as income, length of homeownership, and no delinquent balance.” Others are straightforward: “The Installment Payment Agreement is open to everyone over the age of 65. Pay current taxes in manageable installments instead of in one full payment. All seniors qualify regardless of income. Income limits apply to applicants under 65 years old.”
Some programs are not reductions or grants, but are similar to reverse mortgages and lower the equity in your home to cover your real estate taxes. It also places a lien on your home, which may limit your ability to borrow for repairs. If your real estate tax increases by more than 15% from the previous year, you may be able to pay the excess amount at a later date (defer payment). If eligible, you can defer payment until the property is transferred or sold. The city will charge a minimum annual interest rate of at least 2%, and the deferred amount will also be subject to a lien.
This confusion makes it harder for people to get help. As reported, the city knows that 33% of people eligible for the $1,400 reduction in real estate taxes don’t receive it.
The city does not report how many people are enrolled in the programs, nor how many are eligible. Targeted outreach to catch people cheating, as welcome as that is, doesn’t explain why people who are eligible but not receiving the exemption aren’t targeted for outreach.
Are the assessments fair? The Philadelphia Inquirer reported that gentrifying neighborhoods saw the largest increases in assessments. “The biggest jump in Philadelphia’s property assessments this year occurred in Kensington, a measure that means many homeowners in the long-struggling neighborhood are likely to see higher taxes.”
In an op-ed, Bill McKinney, the executive director of New Kensington Community Development Corp. (NKCDC), wrote, “last month, housing valuations, and therefore property taxes, increased by 3% across the city. Valuations in Kensington, however, went up an average of 15%, with Mantua, Grays Ferry, and Kingsessing not far behind.”
The city says the assessments are equitable. OPA has released its methodology summary. The summary makes it clear that not every assessment is correct. It says the percentage wrong is acceptable. What it doesn’t explain is why so many properties saw a decrease in land value but an increase in the value of the “improvement” (what’s built on the land). What is remarkable is that the tax is the same. OPA lowers the value of the land, raises the value of the improvement, and it becomes, to the dollar, the same tax. This happens time and time again. It’s possible, maybe, but implausible that, in each case, the reduction in land value and the increase in improvement value ended up being the same tax.
The city hires a local firm to evaluate whether the OPA’s methods are fair. It is a company that has contracts across the nation. Perhaps the most interesting thing about the company is that there is no record of it ever finding any bias of any kind on any assessments. There is not a single report of bias in all the surveys it has done.
Top photo credit: Lomofan77 via Wiki Commons
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