Mayor Michael Nutter announced Wednesday that the city has taken a huge leap toward making its Actual Value Initiative of property tax assessments a reality. Citywide assessments have put the approximate taxable value of all Philadelphia residential, commercial and industrial properties at $96.5 billion.
"For decades, our property assessment system was completely broken," Nutter said. "We had a fundamentally bad system that produced inaccurate data, resulting in an unfair system for Philadelphians. Under AVI, properties have been assessed accurately and fairly [and] the tax formula will be easier to understand."
Properties are currently taxed based on an estimated total value of $38 billion. "A larger aggregate value means a significantly lower tax rate and higher property values, which is a good thing for our great City and its citizens,” Nutter said.
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With the aggregate value pinned down, the projected tax rate for 2014 has been put at 1.3 percent – 1.4 percent if City Council passes Homestead Exemption relief for longtime owner-occupants whose taxes will drastically increase.
Nutter attempted to institute the switch to taxing properties based on their true market value, rather than a predefined percentage, last year. City Council rejected the proposal due to uncertainties about what that total value would shake out to be.
16,065 parcels – or three percent of all properties – must be rechecked due to anomalies. The Office of Property Assessments is currently finalizing the value of those parcels, which will likely add to the aggregate property value estimate.