Many questions remain about what will ultimately happen with Philadelphia property taxes next year. One thing is certain, however. If your 2014 assessment notice overestimates the value of your property, an appeal should be filed this month.
Switching to AVI
The city is moving to a new Actual Value Initiative designed to base property taxes on current market values, rather than the outdated figures that have been on the books for years.
The results are varied. Some property owners are seeing significant increases or nominal changes, while others are actually seeing a reduction in their assessment. Even if your 2014 taxes appear to be lower than your 2013 taxes, your property still may be over assessed. It is imperative to conduct an analysis to ensure your assessment is fair and equitable. If it's not, an appeal should be pursued. Otherwise, you are putting yourself at a competitive disadvantage.
Property owners have until March 31st to request a first-level informal review by the Office of Property Assessment. If unsatisfied with the outcome, you may appeal to the Board of Revision of Taxes. Formal appeals are due to the BRT by October 7, 2013.
Tax Rates Must Be Set
It will be several months, perhaps even longer, before Philadelphia's real estate tax rate is set. Until then, any discussion about whether taxes will rise or fall is highly speculative. Estimated tax rates have been anywhere from $1.25-$1.80 per hundred dollars of value.
Traditionally, commercial properties have been assessed closer to market value than residential properties, meaning that businesses have paid more than their fair share of property taxes for years.
The disparity could get even worse. Legislation has been proposed that would create a classification system allowing higher tax rates on commercial property than residential. Other proposals, including homestead exemptions and circuit breakers to benefit residential owners are also under consideration.
Commercial property owners have no control over tax rates or laws that create shifts in the tax burden. In-depth, thorough valuation and equalization analyses are the only defense against an unfair tax assessment.