Reassessment: 2025 (Schrödinger’s Values)
Philadelphia taxpayers are in a Schrödinger’s cat situation with respect to new real estate tax assessments as the result of the City of Philadelphia’s 2025 reassessment: there are new values, but there are also not new values (yet).
As I wrote in March, the Inquirer reported at that time that the City would be reassessing property values for tax year 2025, noting that “many property owners’ real estate tax bills will go up.” The City is statutorily obligated to release its values by March 31st, (see, 53 Pa. C.S. § 8565), but it did not meet that deadline this year. While there was speculation from members of the Philadelphia Bar Association that the Office of Property Assessment (OPA) would be aiming to release the new values in May, more recently, on June 18th, the Inquirer reported that “the city is expected to release new property assessments this month, and many homeowners will see significant increases.” As a result of estimates reflecting those significant increases for homeowners, City Council approved measures offering additional relief to residential owners. It is, thus, very clear that homeowners’ values are likely to go up.
Interestingly, it is well known that commercial properties have suffered significant property value decreases; specifically, in January the Philadelphia Business Journal reported over $10 billion in commercial property value losses in the wake of a changing market following COVID-19. Yet, the Parker administration has apparently produced estimates that commercial property values will largely be “staying flat.” This would seem to imply that the onus will be on commercial taxpayers, both owners and tenants, to appeal any values that have not been sufficiently reduced.
Accordingly, while we are in this Schrödinger’s values situation, all signs point to bases for property tax assessment appeals. While the OPA has yet to make its values public, if, in fact, the Inquirer reported correctly that the new numbers will be released this month, that means they will come out on this platform tomorrow, June 28, 2024. Even if they do not, the Board of Revision of Taxes (BRT) already has 2025 tax appeal forms available for any taxpayer to fill out and submit by email to appealinquiry@phila.gov. There are benefits to appealing now, even if you don’t know your 2025 assessment or want to consider it further. For one thing, the BRT is still hearing appeals from 2023 and 2024 and, as a result, is scheduling new hearings around a year out. If there is another deluge in appeals by the deadline this year, which is October 7, 2024, your appeal may get scheduled even further out, possibly 15-18 months out. In addition, appealing to the BRT is free, and you can always withdraw your appeal by filling out a different form and submitting it to that same email address, also without cost.
Do remember that, to protect your appeal rights, you must submit an appeal to the BRT. While the OPA offers the opportunity to informally review taxpayers’ values upon submission of what is known as a First Level Review application, if you fill out only the OPA’s form and neglect the BRT’s process, you may forfeit your right to appeal the OPA’s decision. At the very least, and as I will explain in a separate blog entry, failure to timely pursue your BRT appeal may result in your being precluded from taking advantage of provisions allowing taxpayers to make safe harbor payments on the amount of lesser, pre-reassessment values.
If you would like to talk further about your real estate tax issue, feel free to contact me.
8/5/24: read about Philadelphia Mayor Parker’s press conference on the 2025 reassessment talking about the 19% average increase to residential taxpayers here.