A Philadelphia City Councilman says he wants to defer some of the big tax hits that will come from reassessing all properties in the city.
Councilman Kenyatta Johnson’s proposal says that if your Philadelphia property tax bill increases by two and a half times and you meet certain income guidelines, you could put off paying some of it.
“Some parts of my district, we will see real estate taxes increasing by 400, 500, 600 and even 1,000 percent,” he said. “So we’re not saying individuals shouldn’t have to pay their fair share, but they also shouldn’t be penalized as it relates to a system that has been broken that we decided to fix.”
The Actual Value Initiative is being pushed through to replace outdated property assessments in Philadelphia with ones that are supposed to reflect current market values. Later this year, City Council and Mayor Michael Nutter will set a new tax rate, so it’s still a bit fuzzy how much individual bills will go up.
The plan calls for setting that rate in a way to bring in the same amount of revenue from the property tax, but individual homeowners could see vastly different effects depending on whether values are rising or dropping in their neighborhood.
Under Johnson’s plan, homeowners would have to pay higher bills, up to two and a half times what they pay now. The rest of the increase could be put off until the property is sold. He says the goal is to cushion the blow of a massive tax hike.
The deferral isn’t free. To get extra time, you would be charged interest. That also would come due when the property is sold.
This is one of many property tax relief bills under consideration in Philadelphia City Council.