Mayor Michael Nutter — flanked by several administration finance officials – announced during a press conference at City Hall on Friday that the controversial Actual Value Initiative is “here to stay,” and laid out the preliminary framework for the plan, which would be implemented after City Council passes a budget in the fall.
Nutter said many homeowners will not see their property taxes rise due to the new tax rate; however, Nutter also announced that as many as 71 percent of all homeowners will either see their tax rate stay the same or will see their taxes either raised or lowered by roughly $400, depending on assessment value and the yet-to-be-determined property tax rate.
“The [new] property assessment system will rapidly be on its way, one that is appropriate, fair, accurate, equitable and most importantly, understandable; a system that hasn’t existed in maybe 40 or 50 years,” Nutter said. “Today is a historic day. The broken system that unfairly undervalued or over-assessed residential, commercial and industrial property in Philadelphia for decades will now be a thing of the past. The old system is dead.”
Nutter said the new assessment plan would provide “an accurate reflection of the real value of our properties,” and was designed to be fair to all Philadelphia homeowners. The Office of Property Assessment began mailing out the property tax notices on Friday for fiscal year 2014, and Nutter went to great lengths in reiterating that the notice was not a bill, but an alert to homeowners that the new assessment rates were on the way.
The information is available on the city’s website, www.phila.gov/opa; homeowners can also call the Office of Property Assessment at 215-686-9200.
Nutter said that it is impossible to know right now what that rate would be, but the mayor mentioned 1.25 percent as a likely figure.
“Please, do not try to calculate your property taxes based on this new assessed value and the current tax rate. You cannot take the new assessment notice and the assessed value and multiply it by the current tax rate,” Nutter warned. “It would be wrong. It would be astronomically wrong, and is not reflective of where things will be in the future.
“Working with Council President Darrell Clarke and all the members of City Council and my administration, we will set a new, significantly lower tax rate.”
The Office of Property Assessment spent two years assessing roughly 579,000 properties, and has about 20,000 more to go, said Chief Assessment Officer Richie N. McKeithen, who noted that the city’s properties were divvied up into 640 geographical mapping areas.
“Properties were valued based on their use, and properties had to be separated based on type … location is one of the utmost factors that is used to drive the value of property,” McKeithen said. “The properties are valued based on a comparable sales approach, and is the most renowned approach for valuing residential single properties.”
Nutter seemed to recognize that there will be concerns over the potential for residential taxes to go up, and the fear of some homeowners that they may not be able to pay their real estate tax. Toward that end, Nutter outlined several steps homeowners could take to appeal the assessed value, included undertaking a first-level review. Nutter said he had a review done of a recent assessment of his home, and found errors in the tabulation which resulted in Nutter’s family paying less property tax.
“If you believe your assessed value is incorrect, you can appeal your valuation, and I encourage people to do that, as I always have. As a part of AVI, we are creating a new process, called the first-level review. The first-level review is an informal way to have your value reexamined by the Office of Property Assessment, and perhaps changed,” Nutter said, adding that there we a wide array of credits, exemptions and tax breaks available to homeowners, including the recently-signed Homestead Exemption. “It allows property owners to directly contact their assessors to discuss their assessed value, and to provide information while they review your assessment.”