Unless you live under a rock, or perhaps in Kansas- you have probably heard of the city's proposed "AVI" or Actual Value Initiative. Should you be so fortunate to live in a newer building in town and be shielded by a tax abatement the issue may be less of a concern.
But to really know what the heck is going on, I turn to my condo lawyer guru Gary Krimstock for answers....
WHAT IS IT? AVI is the Actual Value Initiative for Philadelphia real estate tax assessments. It has been talked about, threatened, promised, and been in the works for years. It wasn't quite ready last year, so it was postponed until this year, which means it will be put in place this year for the 2014 tax year. We are being told that the non-uniform, unfair, obsolete and broken tax assessment system in Philadelphia has finally been changed and fixed. The new OPA (Office of Property Assessment), instead of the old BRT (Board of Revision of Taxes), has now revalued all 579,000 properties in the City at their full market value. A property's assessment for taxes will now be its actual market value, instead of some arbitrary and inaccurate fraction of its market value.
WHAT WE KNOW. The OPA has completed its work to revalue all the properties, and has now sent out notices of the new full market value assessments for 2014. By March 31, 2013, you can request an informal review of your assessment by the OPA. The formal appeal process with the BRT is still available, and the deadline for 2014 taxes is October 7, 2013.
WHAT WE DON'T KNOW. City Council and the Mayor have to set the tax rate for 2014 at a new level to keep the promise of the AVI being revenue neutral. Since the property assessments have been dramatically increased to full value, the tax rate will have to be dramatically reduced to keep the overall tax revenue the same for 2014 as for 2013. This decision should be made this Spring as part of the City's adoption of the 2013-14 fiscal budget. They will also be deciding if there will be a Homestead Exemption, and how much it will be. They may also consider adopting some buffering or phasing-in measures to lessen the impact of large tax increases. But, we don't know what they will adopt, or when they will adopt it. So, while you do know your 2014 property assessment, you don't know your 2014 real estate tax, not yet anyway.
WHAT TO DO. If your new 2014 assessment is less than the actual market value of your property, and the information about your property shown on the notice is generally correct, then we recommend that you do nothing at this time. Do not request the OPA to review your assessment. Depending upon what happens in the next several months, you can still consider filing a formal appeal to the BRT by October 7, 2013 if you want to dispute your assessment.
REMEMBER. Your property assessment can be appealed, but the tax rate and your tax bill cannot be appealed. Appeals can be risky and expensive, because the result can be no change, a decrease, or even an increase in your assessment. There could be delays or changes in the implementation of AVI, depending upon the actions of City Council, the Mayor, and any lawsuits that could be filed to challenge the legality of some of these planned changes.
CALL US WITH ANY QUESTIONS. Gary Krimstock at 215.893.8722. We will be happy to give you advice and represent you in seeking to lower your assessment now or with an appeal later this year. Our law firm has more experience representing property owners in tax appeals in Philadelphia than any other firm, and we look forward to helping you.