The other shoe has dropped. First, as previously discussed, the significantly higher 2019 reassessments for many properties throughout the city.
Now, for 2019, the city has proposed an increased tax rate as well. The Tax Rate for 2018 (and previous years) is 1.3998%. For 2019, it is going to 1.4572%.
So for every $100,000 in assessed property value, the tax will go from $1,399.80 to $1,457.20. A $57 increase per $100,000.
At the same time, the city has increased the Homestead Exemption (available only for residential owner-occupants) from $30,000 to $45,000. So the Homestead tax reduction in 2018 is $419.94. For 2019, it will be $655.74. So the 2019 Homestead Exemption provides an additional $235.80 tax reduction for Philly homeowners.
From a tax policy perspective, the overall 2019 change to the tax rates/homestead is progressive—the lower your assessment, the more you save; and the higher your assessment, the more you pay. All property owners with assessments below $413,684 will have a lower tax amount based on the 2019 rate change and all property owners with assessments greater than $413,684 will have a greater tax amount.
For example, in 2018, a $200,000 market value assessment would owe $2,379.66. In 2019, that is reduced to $2,258.66. On the other hand, a $1,000,000 assessment will go from $13,578 (2018) up to $13,916 (2019).
Then there is the double whammy. If your assessment went up significantly for 2019, not only do you pay more for the higher value, but you are then on the wrong side of the new tax rate as well. For example, a homeowner had a 2018 assessment of $300,000. Her 2018 tax is $3,779. The OPA raises the assessment to $550,000 (not an uncommon increase). Her 2019 tax under the new rate and homestead is $7,359. Just about doubled. Wow. That hurts.
I really dislike high property taxes, but I really like discussing them, and I will continue to do so in the coming weeks. In the meantime, please feel free to reach out anytime with questions, comments, or further discussion.
Finally, do you know someone who is considering buying or selling real estate? I would be honored if you recommended me to be their trusted adviser. I pledge to provide them with the absolute highest level of service.
City Block Team