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City makes huge leap toward Actual Value Initiative of property tax assessments

Mayor Michael Nutter announced Philly's approximate aggregate property value, which greatly impacts how much taxes will rise.

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.

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.

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