What's going to happen to your property tax bill under AVI?
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What's going to happen to your property tax bill under AVI?
Catherine Lucey
Even if you’ve been following the property tax debate closely, you probably have a whole bunch of unanswered questions hanging out there. And for most Philadelphians, I’d guess the biggest one is this:
What’s going to happen to my tax bill?
Well today at PhillyClout, we’re actually going to try and answer that to the best of our ability.
But first a recap:
Mayor Nutter is proposing moving the city from the current property tax system, which relies on fractional assessments to a system where a straight rate will be placed on the market value of your home. This is known as the actual value initiative (AVI). Because Philly’s tax system has been wrong for a very long time, some residents are currently paying too much and others too little, although we don’t know who exactly because the city has not released the new assessments.
Since Nutter’s proposal, City Council has been debating whether to approve the plan and if there are groups that should get tax relief. Key among their concerns are longtime residents of gentrified neighborhoods, who could face huge tax increases that they can’t afford. They are also looking at doing a “homestead exemption” that would reduce the assessed value of all owner-occupied properties.
Complicating the AVI debate is that Nutter wants to raise $94 million in additional revenue for the schools when the city goes to AVI. He says this is capturing the increase in property values, while critics call it a backdoor tax hike. Council now says they plan to vote separately on AVI and schools funding.
Ok, still with us? If you are, you probably still want to know about your bill, right? Here goes…
We can’t definitely tell you what will happen because the city hasn’t released the new market value assessments or the new millage rate yet. But during testimony in City Council yesterday, Finance Director Rob Dubow said that a Council consultant had made a reasonable estimation that the total value of property in Philadelphia was $80 billion. He also said that if that number was correct your tax rate could range from 1.6 percent to 1.8 percent, depending on the size of the homestead exemption.
Let’s do some speculative math. Let’s say your house is likely worth $250,000, based on recent sales in your area. With a $30,000 homestead exemption and a 1.8 percent tax rate (one possible scenario), your bill for next year would be $3,960. If your home is likely worth $150,000, the bill would be $2,160. And if it’s worth $75,000 then it would be $810.
Again, these are still just projections at this point. Still, it's clear that depending on your current assessed value, your bill could go up or down. Some neighborhoods that have experienced rapid gentrification could see major upticks in their bills. Where do you think yours is likely to go, based on this scenario?
Comment removed.
Don't like this math - so my house (just appraised @ 205k) would get a homestead of 30k & if taxed @ a 1.8% millage rate my new tax would be around $3100 ... a 700 increase from it's current #. THAT SUCKS! Thought they were looking at a millage of 1.25%. What happened? I'm actually all for the AVI but I really hope these projections are revised down somewhat. (Need to be tied to a REASONABLE tax rate)— Kennedy- The millage is higher because we have added a homestead exemption, a gentrification exemption, a cooler Philadelphia-based tattoo exemption, and any other exemption you can think of. Remove the exemptions, get lower rates. — stevestevestevesteve
- CleanupPhilly , do you work ?— murphthesurf
- This will be a catastrophe for Philadelphia.— chuck.goodwin
- 1000 Block of Fernon (South Philly) - 2011 sales price $275,000. Real estate taxes - $818. Effective rate - 0.3%
4200 Block of Carteret (NE Philly) - 2011 sales price $185,000. Real estate taxes - $2,623. Effective rate - 1.4%
7100 block of Lincoln Drive (Mt. Airy) - 2011 sales price $250,000. Real estate taxes - $3,459. Effective rate - 1.4%
2200 block of Wallace (Fairmount) - 2011 sales price $445,000. Real estate taxes - $4,711. Effective rate - 1.1%
4400 block of Sansom (University City) - 2011 sales price $292,500. Real estate taxes - $1,557. Effective rate - 0.5%
Show me the equity in this system, please.— citylumberjack - Amen. My bill will go up but I"LL BE OKAY WITH IT if everyone is paying their fair share. — stevestevestevesteve
- My bill will increase 1200% with this math if my home is valued at what I purchased it for. I have been paying way too little and am happy to pay more, but not in one year. And not if the same house on the same block is still paying less. I don't have a lot of confidence that all our values will be current. Those of us who can will files suit and cost the city more money defending this half-baked proposal. I'm very disappointed with this administration.— akelsey
- While residential rates skyrocket, commercial rates will drop steeply.— chuck.goodwin
- Can you say "Mass exodus?"
Democrats, you've been lock-step voting in these people to public office for decades. Looking for more ways to get your money out of your pockets is what they do. But go ahead, keep voting for them. You know, because they care about you and your family.
Stop complaining and just pay your "fair share" is what they will say. After all, that's what they're all about, fairness, not getting your money, right?
"There's a sucker born every minute" ~ P.T. Barnum (attributed)— www.mattveasey.com
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David Gambacorta spent a small eternity writing about cops, drug dealers and serial killers. Now he’s writing about power and politics – which sometimes reminds him of the old crime beat. He joined the Daily News in 2005. And yes, he knows you’re not quite sure how to pronounce his last name. E-mail tips to gambacd@phillynews.com
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Jan Ransom, a native New Yorker, joined the Daily News in 2010 after graduating from Howard University. She has since written about the difficulty of filing police complaints, tax deadbeats and life after violent home invasions. She joined the Daily News City Hall Bureau in 2011 and has plunged headfirst into reporting on administration budget battles and City Council shenanigans. E-mail tips to ransomj@phillynews.com
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Sean Collins Walsh is from Bucks County and went to Northwestern University. He joined the Daily News copy desk in 2012 and now covers the Nutter administration. Before that, he interned at papers including The New York Times, The Dallas Morning News and The Seattle Times. E-mail tips to walshSE@phillynews.com
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