Homestead Exemption/Property Tax Increase vs. Ten-Year Tax Abatement/New Construction

[Gatorjay75]

I recently received a letter from the city regarding property tax increases and an application for the Homestead Exemption. I am 3.5 years in to my ten-year tax abatement and am wondering if I am basically getting scr3wed out of 6.5 years because of the impending property tax increases. Does anyone know if the 10-year new construction tax abatement precludes me from these increases? Thanks!!!

[raider.adam]

I recently received a letter from the city regarding property tax increases and an application for the Homestead Exemption. I am 3.5 years in to my ten-year tax abatement and am wondering if I am basically getting scr3wed out of 6.5 years because of the impending property tax increases. Does anyone know if the 10-year new construction tax abatement precludes me from these increases? Thanks!!!

The abatement is on the building part. You still pay property taxes on the land, so the property tax increase will effect the land portion.

Due to the ten year tax abatement, the homestead exemption will likely give you no help since you are already abated.

[mgwaxman]

Abated properties are eligible for the Homestead Exemption and should apply. If you have questions about the Homestead visit opa.phila.gov or call the Homestead Hotline at 215-686-9200.

[raider.adam]

Abated properties are eligible for the Homestead Exemption and should apply. If you have questions about the Homestead visit opa.phila.gov or call the Homestead Hotline at 215-686-9200.

Well, that really isn't technically true since there actually isn't a homestead exemption program in existence yet. Nothing says the actual program (if one does get created) won't make abated properties ineligible.

My main point was though, if you are in new construction and you have like $200K abated, a $30K homestead exemption shouldn't make any difference, unless the legislation has some ridiculous loophole where it will be applied against the assessed land.

But yes, everyone should apply anyway.

[seand]

Technically the exemption should be against the "homestead" not the land, right? The whole point is to give homeowners a break for their primary residence that owners of rentals and commercial properties don't get.

[raider.adam]

Technically the exemption should be against the "homestead" not the land, right? The whole point is to give homeowners a break for their primary residence that owners of rentals and commercial properties don't get.

Well, it "should" go against the total assessed value. It shouldn't stack with the new construction abatement. It should overlap.

For example.

House is assessed for $200K.
Land $10K

House was new construction so the $200K is abated and you are currently only paying property tax on the $10K land.

A $30K exemption should make no impact because it is overlapping with the $200K abatement and the person should still be paying on the $10K land.

I sure hope they don't implement it where the exemption gets applied to the active assessment, the land, and dropping their tax liability to $0.