Following months of speculation and debate, the City of
Philadelphia has officially postponed implementation of the Actual
Value Initiative ("AVI") until Tax Year 2014. However, in
the interim, for Tax Year 2013, the City has increased the tax rate
by 3.6 percent—it will be $97.71 per $1,000 of assessed
value, an increase over the 2012 rate of $94.32 per $1,000 of
assessed value. Read on to learn more about critical issues and
timelines for 2013 real estate taxes, the rollout of AVI, the
Market Value Appeal process, and Homestead Exemption Application
City of Philadelphia Tax Year 2013 Real Estate Tax Rate
For upcoming Tax Year 2013, based on recently passed City
Council legislation, the City of Philadelphia will be using values
certified for Tax Year 2011 to calculate tax bills, with
adjustments for subsequent improvements, demolition and destruction
(if applicable). According to the Office of Property Assessment
Most properties in Philadelphia will experience no change in
value from 2012.
Approximately 25,000 properties are estimated to have a change
in value and are expected to receive a notice in late September
2012 with the new value. Properties with no change in value will
not receive a notice.
Tax Year 2013 appeals must be filed no later than the first
Monday in October (October 1, 2012)or thirty (30) days from the
date on the Assessment Change Notice, whichever date is later.
Tax bills are expected to be mailed, as usual, in December,
with payment due March 31, 2013 (with a 1% discount if paid by
February 28, 2013).
Tax Year 2013 bills will be calculated based on the following
Certified Market Value x 32% (pre-determined ratio) x 9.771%
The tax rate has increased by 3.6% compared to Tax Year
Tax Year 2014 Actual Value Initiative Update:
According to the OPA:
The City of Philadelphia will be moving to property assessments
based on Actual Values for Tax Year 2014.
The OPA will mail property owners notices of assessment change
in February 2013 to alert them to the new values.
These values should be based on the market value of the
property, which means the value that the property would sell for on
the open market.
If a taxpayer believes that the new value is incorrect, he/she
can request an informal review by the OPA evaluator who initially
assigned the value. Taxpayers will have an opportunity to provide
additional information to the evaluator for consideration. The
evaluator will adjust the value if appropriate. If, after the
informal review, the taxpayer believes that the value is too high,
formal appeals may be filed to the Board of Revision of Taxes by a
date to be established.
With the implementation of the Actual Value Initiative, the
formula for calculating real estate tax bills will be simplified to
Certified Market Value multiplied by the Tax Rate (to be
determined), removing the fractional basis for calculations. The
2014 Real Estate Tax Rate is expected to be published by May 31,
Homestead Exemption Alert:
Beginning in Tax Year 2014, the City of Philadelphia is
introducing a new partial-tax-relief program for homeowners called
the Homestead Exemption, in which any homeowner who uses the
property in question as his/her primary residence is eligible for
the exemption. Under the Homestead Exemption Program, the assessed
value of each eligible homestead is reduced by the amount of the
homestead exclusion (expected to be $30,000) before the real estate
tax is computed. Applications for Homestead Exemption that have
already been submitted will be processed and held for Tax Year 2014
and future years. Those who have not already applied should receive
an application in the mail in early September 2012. Applications
received by November 15, 2012 will be reflected on
the Assessment Change Notices going out in February 2013.
Applications received after November 15, 2012 may not be shown on
the Assessessment Change Notices. The Homestead Exemption program
will not be in effect for Tax Year 2013 and applications do not
have to be submitted by July 31, 2012, as previously announced by
the City. According to the OPA, the application deadline is now
November 15, 2012 for Tax Year 2014 eligibility.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On October 5th, 2016, the Internal Revenue Service and Treasury Department published final, temporary and reproposed regulations1 under Sections 707 and 752 of the Internal Revenue Code of 1986, as amended.
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