Homestead? Some get exemption without one

THE CITY is offering a tax break to homeowners to soften the blow of its property reassessment. Known as a homestead exemption, it's limited to homeowners who live in their houses.

But the city has approved exemptions for at least 19 properties that have no houses on them, according to the Office of Property Assessment's records.

Marisa Waxman, OPA's assistant administrator, said that means one of two things: Either the property owners committed fraud or city records are wrong.

It appears to be a little bit of both, actually.

In at least one case, a building was miscategorized as "land" by the city. One of the goals of the city's property-tax reassessment, called the Actual Value Initiative, is to fix those types of errors.

In other cases, the city approved homestead exemptions for properties that are not primary residences, such as a parking lot. That's not supposed to happen either.

Waxman said that the city is working to find and address such problems.

"We have 10 months before the homestead affects tax bills," she said. "We will be doing eligibility audits on the approved applications going forward."

Waxman also warned that people who knowingly file a false application could face a $2,500 fine and misdemeanor charge.

City Controller Alan Butkovitz, a critic of AVI, said that the discrepancies are not a good sign.

"This is another indicator of the unreliability of city records," he said. "You need to test for your own error rate before you send an announcement to everybody that may trigger mass sales, may undermine neighborhood property values."

University of Pennsylvania economist Kevin Gillen, who consulted the city about AVI, said that mistakes happen. But he argued that perfect should not be the enemy of the good.

"AVI should be thought of as a process, not a product," Gillen said. "There will be continued revisions that make improvements to the data going forward."

The city also approved homestead exemptions for 30 commercial properties and five industrial properties. Waxman said that such buildings can qualify for a partial exemption if they have a residential component.