A Pew Charitable Trusts report found that Philadelphia’s new property assessments are completely redistributing the property-tax burden.
Report author Emily Dowdall said all Philadelphia homeowners will be paying $72 million more in property taxes next fiscal year than in 2013, if Mayor Michael Nutter’s administration keeps its pledge to raise the same amount of revenue from property taxes under the new assessments.
At the same time, owners of commercial properties, including Center City offices, will be paying $55 million less. And owners of residential properties that have 10-year tax abatements will be paying $3 million less.
“So even though the city’s raising the same amount of money, and therefore it can be termed ‘revenue-neutral,'” Dowdall said, “depending on what kind of property you own, it will not be effectively revenue-neutral.”
The Pew study affirms reports by news media and City Council, which have shown that a shift in the tax burden will occur under the new assessments. This is because commercial and abated properties apparently were assessed at closer to their market value than residential properties in the past.
Still, it’s all relative. Dowdall said the average property tax bill next year for Philadelphia homeowners will be less than for homeowners in other big U.S. cities, such as Boston and Washington, D.C.
Dowdall also pointed out that the homestead exemption, a small tax break for homeowners, would help offset the dramatic shift in the tax burden. But it wouldn’t eliminate it completely.