Philadelphia Mayor Michael Nutter says the city’s defective property tax system is no more.
After working to get its house in order for several years, the city mailed out more than 500,000 new property tax assessments Friday. The city admits it had previously been assessing people’s homes and businesses inaccurately.
“The broken system that unfairly undervalued or overassessed residential, commercial or industrial properties in Philadelphia for decades will now be a thing of the past,” Nutter said. “The old system is dead.”
The city plans to use the new assessments to calculate property property tax bills in 2014.
If City Council passes a 1.25 percent property tax rate for next year, then city officials say about 333,000 of Philadelphia’s 579,000 property owners would see their tax bills go up or down by less than $400. At the same time, 36,000 owners would see hikes of more than $1,000.
But the property tax rate could end up higher than 1.25 percent.
If Council decides to keep the homestead exemption now on the books, city officials say that will bump up the rate to about 1.4 percent. That clause takes the first $30,000 of a private home’s market value out of the tax calculation. It doesn’t apply to commercial properties.
The city’s new property assessments are supposed to reflect how much properties would actually sell for in the marketplace.
Chief Assessment Officer Richie McKeithen said it took more than two years to reassess every property in Philadelphia. His team assessed residential properties using a technique known as the “comparable sales approach.”
“This is the most renowned approach,” he said. “Our properties were valued based on their comparability to properties that have sold.”
Nutter said city assessors wrongly valued his own home at first.
“Records indicated that I had a two-story home with a garage,” he said. “I do have a garage, but actually it is a two-and-a-half story home. So the information was incorrect.”
After Nutter told city assessors about the error, they determined that his property is worth $223,100, which is $60,000 more than they originally thought.
If property owners think the city got their assessment wrong, they can ask for an informal review by the Office of Property Assessment (215-686-9200).
Last year, critics said Nutter didn’t provide enough information about the new assessments.
In a stark departure from that period, the Nutter administration published its database of new assessments online Friday. It also launched an application that lets users search for their 2014 assessments and estimate their property tax bills.
City Managing Director Richard Negrin said the administration did this for two reasons. First, it is committed to the open data movement, he said. Second, it wants to give the public a clear look at the tax changes.
“There’s so much anxiety out there,” Negrin said. “There’s been kind of a wide amount of inaccurate information out there from a number of folks, and we thought it was important to get the word out.”