Council passed a bill out of committee Wednesday that would set the new property tax rate under Mayor Nutter's Actual Value Initiative at 1.34 percent, with a $30,000 homestead exemption.
Nutter had proposed a lower homestead exemption at $15,000, which meant the rate also would have been lower, at 1.3204. The homestead exemption is the amount eligible homeowners can deduct from their assessments before the tax rate is applied.
Council amended Nutter’s proposal to reflect the new numbers, the result of negotiations between Council and the administration. Under the legislation now, the owner of a home worth $100,000 would be taxed on $70,000 and owe $938.
A Council analysis found that with the right mix of tax relief – including a high rate of participation in a $30,000 homestead exemption – as many as 72 percent of homeowners could see lower tax bills and just 10 percent would see bills rise by more than $400.
The deadline to apply for the homestead exemption recently was extended to September 13.
Four Council members – Democrats James F. Kenney, Mark Squilla and Kenyatta Johnson, and Republican Brian J. O’Neill – voted against the bill. Squilla and Johnson’s districts, which include Center City and bordering neighborhoods, are expected to be the hardest hit by tax increases under AVI.
Council also passed a bill out of committee Wednesday to provide deferrals on large tax increases to eligible, low-income homeowners. That bill was sponsored by Johnson and Councilwoman Maria Quiñones Sánchez.
Both bills will be given their first reading on Thursday and could pass Council on June 13.
The committee did not vote on a bill to increase the liquor-by-the-drink tax, part of the mayor’s plan to find money for the struggling school district. Last week, the committee moved a cigarette tax, also dedicated to school funding. Both taxes require permission from the state to enact.
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