Reassessment: 2025
Philadelphia Mayor Cherelle Parker does not include any real estate tax increase in her Fiscal Year 2025 budget. However, that does not mean you will not face a property tax hike, because there is going to be a property tax reassessment this year.
Mayor Parker touted “No NEW TAXES! No new taxes on the people of Philadelphia!” in her recent budget speech. What she didn’t mention, but what was confirmed in an Inquirer article that same day, is that there will be a real estate tax reassessment this year, effective for tax year 2025.
I’ve previously written about how Philadelphia is the only jurisdiction in this Commonwealth that can effect an unlimited property tax increase by reassessing values without a concurrent decrease in the real estate tax rate to make the reassessment revenue neutral. Without a change in the property tax rate, this means your tax bill will go up or down with the new value of your property. In fact, another Inquirer article which reports that there will be no increase in local taxes with this year’s City budget, notes that it has been the City’s policy to increase property tax revenue through reassessments.
Specifically, Sean Collins Wash writes that City officials have been “allowing revenue from the real estate tax to grow organically as property values increase[].” This language implies that this is a passive outcome of an inevitable circumstance. In truth, the City must choose whether or not to actively conduct countywide reassessments. Most recently in the wake of COVID-19, the City chose not to reassess properties in order to preclude widespread property tax increases. That is not the case this year; as Rob Dubow, the City’s Finance Director, reportedly confirmed, “the administration is resuming reassessments,” which means that “many property owners’ real estate tax bills will go up.”
Given that a change in Philadelphia’s property values is imminent, when should you expect to see it? The applicable statute provides that the OPA “shall certify assessed values by March 31 of the preceding year.” See 53 Pa.C.S. § 8565. In other words, the OPA is legally mandatd to certify new values for 2025 by next Monday, March 31, 2024. That said, the last time a property tax reassessment occurred, in 2022, the OPA did not certify values until August 10th. Because the deadline to formally appeal your property tax assessment to the Board of Revision of Taxes (BRT) is always the first Monday in October (this year, 10/7/24), this means that the time to look at your new property value(s) and decide whether or not you should appeal is reduced from six (6) months to only around one (1) month. It virtually guarantees that you will not be able to file an application for an informal First Level Review, the form for which is mailed out with your new assessed value, and get an answer before the formal appeal deadline.
I happened to hear over the weekend that while the City is reassessing property values, there will likely be a delay in releasing the new values. You should, however, not wait to take action at some indeterminate point in the future. Go to the City’s website by April 1st to look at your property value(s) to see if your current assessment is already higher than what you think it would sell for on the market today. If it is, think about filing a tax year 2025 appeal early, in May or June. At the very least you will avoid the rush of filings and make it less likely that your appeal gets overlooked due to some administrative mistake. At best, you may be scheduled sooner for a hearing. Even if your 2024 assessment is acceptable to you, set a reminder to check again in June to ensure you don’t overlook a valuation increase when new values are released for 2025. Remember, tax bills are not issued until after assessment appeals are due; accordingly, if you wait to get your tax bill to determine if your new valuation will result in a tax hike, you’ve already blown the deadline.
[Edit 6/28/24 and 7/9/24: read my latest on the 2025 Reassessment here (on the implications of what the City has said about its reassessment numbers thus far), here (about the time by which it must publish the new numbers) and here (on the Mayor’s 8/5/24 Reassessment press conference.]
As always, if you need assistance reviewing any of your properties to determine whether a 2025 appeal is warranted, or you have a portfolio of properties you don’t want to forget to check once the 2025 values come out, feel free to contact me here, or by phone or email (below).