Can property taxes go up more than 10 percent per year under AVI?

Absolutely, and many will.

Owners of properties that have been under-assessed could get dramatically higher tax bills, and at the moment the sky’s the limit on how much more you could pay.

Taxipedia is answering people’s questions about Philadelphia’s property reassessment. Today, we’re tackling one from moozicant@yahoo.com: “Can property taxes go up by more than 10 percent per year?”

Absolutely, and many will.

Owners of properties that have been under-assessed could get dramatically higher tax bills, and at the moment the sky’s the limit on how much more you could pay.

When the implementation of the Actual Value Initiative was debated last year, there were some proposals to moderate the impact on homeowners facing sticker shock. One idea was to phase in the increases over a three-year period. Another would have offered some protection to longtime residents of gentrifying neighborhoods.

Last Thursday, Councilman Kenyatta Johnson proposed some relief for families whose incomes are no more than 160 percent of an area’s median. Under his bill, those households could defer any property tax increases greater than 2.5 times their previous bill until they sold their property or could otherwise afford to pay. Everyone would be required to pay at least $1,000.

It’s not clear at this point whether any of these relief measures will be adopted.

One consideration is that anything which eases the pain for taxpayers costs the city revenue, which means the tax rate for everyone will have to be set a little higher in order to make the transition to AVI “revenue neutral,” meaning that the city collects the same property tax revenue overall as it did before.

Council will have about three months to debate the possibilities and negotiate with the Nutter administration. It’s impossible to say at this point where it will end up, but there’s no likely scenario in which AVI is adopted and tax bill increases are limited to 10 percent per year. 

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