Want to reduce your Philadelphia property tax by a significant amount? You've come to the perfect place!
This post is all about tips for lowering Philadelphia property tax.
Last year, Philadelphia experienced a substantial rise in property taxes, negatively impacting investors and homeowners. As a real estate agent with years of experience and a proud homeowner in Philadelphia, I understand the ins and outs of the local market. I am here to guide you through various effective methods that have been proven to successfully reduce your property tax bill. Rest assured that I'll provide valuable insights, personalized advice, and tailored strategies to achieve this goal!
Together, we will optimize your property tax situation and maximize your financial well-being. Here are some of the benefits and strategies you should consider reducing your property tax bill:
Homestead Exemption
One such method that I highly recommend exploring isthe Homestead Exemption.This valuable program allows eligible homeowners to reduce the assessed value of their property, resulting in significant savings on property taxes. By taking advantage of this exemption, you can keep more money in your pocket while still enjoying all the benefits of homeownership in Philadelphia.
How to apply
Remember, the deadline to apply for the Homestead Exemption is December 1st each year. If you want your approval reflected on next year's Real Estate Tax bill, apply by September 13th. For those approved after September 13th, you'll receive a second bill with the adjusted amount due.
Ways to apply:
Online:
You can easily apply using the Homestead Exemption application on the Philadelphia Tax Center. No need to worry about creating a username and password - submit your application online. Call (215) 686-9200 if a previous owner is listed or submit a paper application instead. We're here to help!
By phone:
You can contact the Homestead Hotline at (215) 686-9200.
By mail:
To apply by mail, print out and use theHomestead Exemption applicationand send your application to:
City of Philadelphia
Department of Revenue
P.O. Box 52817
Philadelphia, PA 19115
After your application is approved
Once approved, you'll enjoy the perks of reduced property taxes. You can easily track the property tax change on OPA's property search.
If you were approved after bills were created, the approval would not be reflected on the bill. The Homestead Exemption will be placed on your account as a credit by the Department of Revenue. You can then request a refund for the amount by filing a refund petition.
If your application is denied
The denial letter will list the reason if your application is denied. You can always appeal the decision if you believe your application was denied incorrectly. You should mail a copy of your denial letter and a written statement requesting an appeal to theBoard of Revision of Taxes(BRT).
601 Walnut St.
Suite 325 E.
Philadelphia, PA 19106
To process your appeal, you should submit your request to the BRT within 30 days of your denial letter.
City's Senior Citizen Real Estate Tax Freeze Program
Apart from the Homestead Exemption Program, Philadelphia offers a remarkable initiative designed for senior homeowners. If you meet certain age and income requirements, the Department of Revenue will ensure your Real Estate Tax bill doesn't increase. With the Real Estate Tax freeze, you won't have to worry about your property tax going up, even if your property assessment or the tax rate changes. And suppose your tax liability goes down due to a lower property assessment or a tax rate decrease. In that case, your Real Estate Tax amount will be adjusted accordingly.
Eligibility (as of September 2023)
Age requirements:
In the context of this program, an eligible senior is defined as an individual who satisfies any of the following criteria:
- An individual who is 65 years of age or older,
- A person residing in the same household as a spouse who is 65 years or older, or
- A person aged 50 years or older, who is widowed by an individual who reached the age of 65 before their passing.
Income requirements:
Applicants who meet the requirements should have a combined income of:
- An amount of $33,500 or lower is applicable for an individual or
- A married couple can earn $41,500 or less.
How to apply:
For the quickest and most convenient application process, we recommend applying online by clicking on the "Search for a property" linkPhiladelphia Tax Center; within the "Property" panel, there is no requirement to create a username and password for the electronic submission of your application.
Additionally, you have the option to:
- You can download and fill out anapplication form, making sure to complete the section about your household income.
- Depending on the situation, you must provide documentation to verify your or your spouse's age and income eligibility. Examples of acceptable proof of age include birth certificates, marriage certificates, driver's licenses, and Social Security award letters. Any document displaying a clear date of birth will be considered valid.It is advisable to send only copies of documents rather than the original ones.
- Mail your application along with proof of age to the following address:
Department of Revenue
P.O. Box 53190
Philadelphia, PA 19105
In addition to the Homestead Exemption Program andCity's Senior Citizen Real Estate Tax Freeze Program, there are numerous other ways that homeowners in Philadelphia can reduce their property taxes. Here are the most popular tax incentives available in the city:
The Philadelphia Property Tax Abatement Program
Allows qualifying property owners to apply for a real estate tax exemption on part or all of their property. This can result in substantial savings on your real estate taxes. To qualify for the program, an individual must meet specific criteria. More information you can findhere.
Owner-Occupied Real Estate Tax Payment Agreement (OOPA)
Under the OOPA program, property owners can make monthly payments on overdue real estate taxes. To qualify for this government initiative, individuals must reside in the property they own or have a legal interest in it, even if their name is not on the deed. Participants must stay current with all new real estate tax payments to remain eligible. The OOPA program categorizes participants into five tiers based on their monthly household income and family size, determining the minimum monthly payment amounts.
Suppose a property owner finds that the monthly payment required by this government program could be more affordable. In that case, they can request an adjustment based on their net monthly income after accounting for expenses. To apply, individuals must complete the application provided and mail it to the Philadelphia Department of Revenue at the following address: P.O. Box 53250, Philadelphia, Pennsylvania 19105. You can find the application form at thislink.
Active-Duty Tax Credit
The Active-Duty Tax Credit is specifically designed to benefit members of the United States Armed Forces Reserve or National Guard called into active duty. Under this government program, these military service members are exempt from paying real estate taxes in Philadelphia if they are called to active duty outside of Pennsylvania. To qualify for this program, the individual must own the property as their primary residence.
The real estate tax credit amount is determined by calculating the portion of real estate tax that would typically be due for a full tax year and then dividing that number by the total number of days in a calendar year. This calculation results in the "daily property tax rate." The daily property tax rate is then multiplied by the days the individual spends on active duty. The resulting number represents the real estate tax credit the applicant can receive.
To be eligible for this government program, individuals must fill out the application provided and mail it to the Philadelphia Department of Revenue at the following address: P.O. Box 53190, Philadelphia, Pennsylvania 19105. You can find the application at thislink.
Real Estate Tax Deferral Program
Philadelphia's city government offers a deferral program for property owners facing a real estate tax increase of over 15% from the previous year. With projected surges in property assessments for 2023, owners should check eligibility for this program.
To qualify, individuals must use the property as their primary residence and ensure all real estate taxes are up-to-date or under a payment agreement. Meeting these criteria is crucial to benefit from the program.
If eligible, the property can defer real estate tax payment until sold or transferred, with a minimum annual interest rate of 2%. Eligibility is based on household income and size. Applications for the 2023 tax year have yet to be available online, but you can review the 2021 applications.
Frequently Asked Questions(FAQ)
How to stay up to date on Philadelphia property tax regulation changes?
Philadelphia's Department of Revenue continuously adjusts and updates real estate regulations to meet citizens' changing needs. Stay informed about potential tax savings by following the City of Philadelphia's social media channels. Sign up for email notifications on new proposals from the department, including hearing schedules and meetings with the Department of Revenue. Contact a local realtor or financial advisor to discuss how regulation changes may impact your property taxes.
Can I claim tax deductions for my home improvements when I sell my property?
You can claim tax deductions for home improvements when selling your property. Depending on the type of improvement, certain restrictions may apply. Contact a qualified CPA to discuss how best to maximize your savings when filing taxes after the sale of your home.
What home improvements are tax deductible when selling a house?
When selling a house, specific home improvements can qualify for tax deductions. Improvements such as adding a second story, replacing windows or doors, or repairing the roof are all eligible for deduction. It's essential to keep track of all receipts and records associated with home improvements to claim them on your taxes. Additionally, you should consult with your accountant about any additional items that may qualify for a deduction.
How to pay property tax online in Philadelphia?
Paying Philadelphia property taxesonlinesaves time and provides access to critical information like payment history and due dates. The City of Philadelphia offers an easy-to-navigate website with clear instructions.
This post is all about tips for lowering Philadelphia property tax.
Conclusion.
Reduced property taxes in Philadelphia are a dream and a reality that homeowners can take advantage of. Thanks to various government initiatives, eligible homeowners can significantly reduce their tax burden with minimal effort. By familiarizing yourself with these programs and applying for them, you can maximize your tax savings and keep more money in your pocket.
When it comes to filing taxes after the sale of your home, it's always a good idea to consult with financial advisors or Certified Public Accountants (CPAs) who specialize in real estate transactions. They can provide expert guidance and help you navigate the intricacies of tax laws, ensuring you achieve optimal savings.
To stay up-to-date with any tax laws and regulations changes, it's essential to regularly check the City of Philadelphia's official website. By reading the latest information and signing up for email notifications, you can stay informed and make informed decisions regarding your property taxes.
Don't miss out on your chance to save hundreds of dollars in property taxes. Take advantage of government initiatives, consult with professionals, and stay informed. Start saving today and enjoy the benefits of reduced property taxes in Philadelphia!
