Looking to buy, sell, invest or rent in the Greater Philadelphia Area? Please call South Philly Vinny at 215-360-3434.
I will preface this blog by stating that I am not an attorney or a CPA. Taxes are never fun to discuss unless there is a way for them to save you money. If you’re looking to save money on your Philadelphia Property Taxes, then you have come to the right place.
How can you save money on your Philadelphia Property Taxes? Apply for the Philadelphia Homestead Exemption. What is the Philadelphia Homestead Exemption you ask?
The Philadelphia Homestead Exemption is a tax relief program that the city implemented back in 2013. It was established to make it more affordable for homeowners who use their home as a primary residence. If your property is not used as a primary residence you will not be able to apply for this exemption. Under this program, homeowners can exempt up to $80,000 on the assessed value of their primary residence from property taxes. Example:
Assessed Value of your primary residence: $300,000
Homestead Exemption: - $80,000
New Assessed Value of your primary residence: $220,000
The City of Philadelphia uses a Tax Rate of 1.3998% (1.4%) of the assessed property value. In using the examples above:
High End without Homestead Exemption: $300,000 x 1.3998% = $4,199.40 in yearly property taxes
Low End with Homestead Exemption: $220,000 x 1.3998% = $3,079.56 in yearly property taxes
By applying and getting approved for the Homestead Exemption, you would save $1,119.84 per year in property taxes (results will vary based on the assessed value of your property).
In order to qualify for the Homestead Exemption, certain criteria must be met:
As stated previously, this must be your primary residence. The exemption will not work on commercial buildings, rental properties, second homes, etc. If your property is in a trust or part of an estate sale, it's best to consult with an attorney to find out if the home is eligible for the exemption.
The Homestead Exemption goes by who is on the deed to the property. It does not transfer with the property. Example: if you are in the process of buying a home (please call me at 215-360-3434) and you find out that the home you are interested in purchasing has a Homestead Exemption, the Exemption will not transfer to you when you purchase the home. You will have to buy the house which generates a new deed. Then you need to have your title company have the deed filed and recorded with the city, county and state. After that process is complete, then you can apply for the Homestead Exemption. You will need a copy of your deed when you apply for the Homestead Exemption.
Deadline to file is by December 1st. However, early filers should apply by September 13th, to see the approval reflected on their property tax bill the following year.
Property owners with 10-year tax abatements are not eligible for the exemption.
Are you interested in finding out what your home's assessed value is? Click on this link here to find out - https://property.phila.gov/ - type in your address on the search bar , click the magnifying glass, you will then see the assessed value of your property.
How to apply:
Online - https://tax-services.phila.gov/_/. You don’t need to create a username and password to submit your application online. If a previous owner is listed, call (215) 686-9200 or submit a paper application instead.
By Phone - call 215-686-9200
By Mail - to apply by mail, print out and fil out this application - https://www.phila.gov/documents/homestead-exemption-application/. You can send your application to:
City of Philadelphia
Department of Revenue
P.O. Box 52817
Philadelphia, PA 19115
Conditional Homestead Exemption:
You may be eligible for a conditional Homestead Exemption if your name is not on the property’s deed. This may be because:
You inherited the house from a deceased relative.
A fraudulent mortgage or deed was recorded for your house.
You entered into a rent-to-own agreement and have paid all or some of the sale price for the house.
This exemption will be granted for up to three years from the date of your application.
Additional instructions for the Conditional Homestead Exemption
If you’re applying for a conditional Homestead Exemption, you must submit:
A paper application with your name on it. Write “Tangled Title” at the top of the application.
A completed and signed Homestead Affidavit - https://www.phila.gov/documents/homestead-affdavit/
Two forms of identification or proof of address. These documents must show your name and the address of the property you’re seeking an exemption for. We accept:
Photo IDs issued by the U.S. federal government or the Commonwealth of Pennsylvania
Valid U.S. passport
U.S. military ID
Government employee photo ID
Utility bills from within the last six months (PGW, Water, PECO, or cable)
Lease or rent-to-own agreement
After you Apply:
If your application is approved, it will be reflected in OPA’s Property Search - https://property.phila.gov/
If you were approved after bills were created, the approval will not be reflected on the bill. The Homestead Exemption will be placed on your account as a credit by the Department of Revenue. You can then request a refund for the amount by filing a refund petition.
If your application is denied, the reason will be listed in the denial letter.
Filing an Appeal:
If you believe your application was denied incorrectly, you can appeal the decision. To appeal, mail a copy of your denial letter and a written statement asking for an appeal to the Board of Revision of Taxes (BRT) - https://www.phila.gov/departments/board-of-revision-of-taxes/.
601 Walnut St. Suite 325 E. Philadelphia, PA 19106
Requests for appeal must be filed with the BRT within 30 days of the date of your denial letter to be considered.
Canceling your exemption:
To cancel your exemption, complete the Homestead change or removal form - https://www.phila.gov/documents/homestead-change-or-removal-form/ and submit it to the Department of Revenue. If you’re canceling your exemption because your property no longer qualifies, notify Revenue within 45 days of the change.
You can also use the form to change the percentage of your property used for something other than your primary residence. You must notify Revenue of this change as well.
Vinny Fracassi aka South Philly Vinny