Philadelphia New Construction: Don't Get Caught With Your Pants Down

If you are, will, or may be involved in a new commercial construction project in Philadelphia, either as a developer or bank issuing construction financing, you should be aware of a dramatic change in the City of Philadelphia’s practice of reassessing such projects mid-construction that could cost (literally) millions of dollars in taxes that were not anticipated when the project began.

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Proposed Constitutional Amendment to the Uniformity Clause: Balanced Reform or a Tax on the Poor?

On October 2, 2018, legislators introduced a bill to amend the Pennsylvania Constitution’s Uniformity Clause to allow for a different (likely higher) rate of taxation on commercial properties than is imposed on non-commercial properties. Read more here . . .

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Construction Tax News

Philadelphia City Council has reached a compromise with the Kenny administration on the proposed 1% Construction Tax.  In short, the Construction Tax is out. 

Instead, Council and Kenney agreed to dedicate additional tax revenue from expiring tax abatements into the City’s Housing Trust Fund, an affordable housing fund, and the City will offer “zoning bonuses” to developers who make voluntary contributions to the Fund.  These “zoning bonuses” will allow developers to expand the height, floor area or density of planned development projects. 

Read more about the compromise here.

DISCLAIMER: Nothing in this blog is intended or should be construed to constitute legal advice, and readers should not rely on it to solve their individual legal issues. No opinion set forth is endorsed by any law firm and is the sole opinion of the author. For help with any present legal issue, please consult a licensed attorney and do not rely merely on anything set forth in this website.

The Great Philly Tax Hike of 2019: Part I

Philadelphia property owners are in for a tax hike effective for tax year 2019. No, not the 4.1% tax rate increase that is being proposed by the Mayor and currently under review by City Council—that increase will come on top of the backdoor tax hike resulting from upward revisions by the City's Office of Property Assessment to property assessments. . .

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Philly is a Special Snowflake: Anti-Windfall Provisions

Philadelphia County is the only county in the entire Commonwealth of Pennsylvania where the county government can generate unlimited tax increases from property reassessments, which are unchecked by any representative body, rather than by tax rate adjustments voted on by City Council.

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Assessment Appeals: No Rules...Umm, Alright?

Philadelphia County is like the Wild West (in a very tame, lawyerly sort of way). There is no local rule indicating how real estate tax assessment appeals should be captioned, how discovery should be conducted (if at all), whether motion practice is even allowed, or any other indication of how the appeal should be conducted.

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The Use & Occupancy Tax: Applying the Proper Assessed Value

In order to challenge your U&O tax, you must challenge the assessed value of property as determined by the Philadelphia Office of Property Assessment ("OPA").  The assessed value used for this calculation is "the assessed value of the real estate as most recently returned by the Office of Property Assessment prior to the start of the Tax Year," which is "July first of any calendar year through June 30 of the following calendar year." This presents a problem. 

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