Sep 12, 2022 - Real Estate

Philadelphia property taxes under the microscope

Illustration: Sarah Grillo/Axios

Philadelphia’s property tax system is at a “key moment” following the release of the first citywide reassessments in years.

  • That’s according to a new report from Pew Charitable Trusts that analyzed our tax system and compared it to 10 peer cities, including New York City, Chicago and Baltimore.

Why it matters: Philly has a history of irregular, inconsistent and seemingly unfair assessments.

Catch up quick: The city skipped reassessments for tax years 2021 and 2022 due to those concerns about accuracy as well as pandemic-related issues.

Zoom in: The property tax bill for a “typical owner-occupied home” in the city was $1,131 in 2021, according to Pew — less than any comparable city besides Detroit.

  • Residential property values increased 31% on average citywide this year since the last assessment in tax year 2020.
  • The city has made adjustments to the property tax system over the years to help ensure better accuracy and fairness, such as accounting for a property’s characteristics.
  • Plus: Officials boosted the homestead exemption to $80,000 this year, which Pew said was generous compared to other cities.

What they’re saying: “How well those adjustments are received, along with the new assessments, will go a long way toward determining whether Philadelphians become more accepting of the property tax,” the Pew report says.

By the numbers: Pew found that residential properties account for 71% of Philly’s property tax revenue in 2021 — the highest share among comparable cities.

Yes, but: Property taxes only accounted for roughly 15% of the city’s budget in fiscal year 2021 — far less than the median for the other peer cities (31.5%).

Go deeper: Read the full report.

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