As City Council prepares for one of the most intense budget seasons, members are looking for ways to protect homeowners under the Actual Value Initiative, a new property-tax system based on market values.
Councilman Kenyatta Johnson introduced legislation today that creates a hardship deferment that would allow eligible homeowners to defer any amount over 2.5 times their previous tax bill until they can afford the bill or until the house is sold.
"Should all property owners pay their fair share? Absolutely," said Johnson, whose 2nd district which includes South Philly, Point Breeze, the Graduate Hospital area, is one of the hardest hit under AVI. "But realistically, these residents did not create this system and we need to recognize that some folks simply just cannot afford such a drastic increase all at once."
Under the bill, the property must be the owner's primary residence. The owner would have to pay at least $1,000 tax bill and meet income requirements. Deferred payments are subject to a lien until payment.
The city currently offers a tax freeze for low-income seniors. Payment plans are available for other seniors, low-income residents and tax delinquents. Also on the books is a deferral law established in 2002 that has not been used. Under that law, if your bill increased by more than 15percent then you could be eligible for deferred payments based on income and other requirements. You would pay 6 percent interest on the deferred amount and the relief would be in effect until the house is sold.
There is also a homestead exemption that would reduce $30,000 from a homeowner's assessment and Councilman Bill Green recently introduced a bill to eliminate it. Council is also eyeing gentrification relief for longtime residents, but is awaiting state-enabling legislation to make it means-based.
"Without protective measures AVI could force honest taxpaying residents out of their homes," said Johnson, who like other members have received a wave of calls regarding the accuracy of the assessments. "It is also crucial that we confirm the accuracy of the new assessments so that we have a fair process."