Civic leaders are speaking out against the city’s proposed method to calculate property tax assessments.
Mayor Nutter has proposed a new property tax assessment system known as Actual Value Initiative. Under the system, Philadelphia’s Office of Property Assessment would analyze the size and age of the property, its location, condition and use in order to determine its value.
According to the OPA website, the purpose of AVI is “to make sure that all values are assessed fairly and in compliance with state laws, statutes, and industry standards.”
A coalition of 21 civic associations, named the Crosstown Coalition of Taxpayers (CCoT), formed to address AVI and conducted a report analyzing its accuracy. The group analyzed 579,000 properties in the city. On Wednesday, the CCoT announced their report found that the valuation methods are “fundamentally flawed.”
“The Crosstown Coalition of Taxpayers is in favor of the AVI goal of fair and accurate assessments, but must now reluctantly conclude that the job has not been well done,” said CCoT’s Stephen Huntington.
According to the report, the current property values over assess less expensive homes while under assessing more expensive homes, large commercial office buildings, taxable land on parcels already enjoying abatements on improvements, and two to four family properties.
“Our analysis shows that the most expensive homes are assessed for less than their market value. Homes selling for less than $50,000 are assessed at twice the market value,” said CCoT member Matt Ruben. “AVI is placing an unfair burden on the owners of lower-priced homes.”
Stephen Huntington, who coordinates the Coalition, says that according to the OPA, his neighbor’s tax bills will be substantially lower than those who own older homes a few blocks away. He also says people with older homes in South Philadelphia could end up paying twice as much in taxes.
The CCoT also made the following claims in their report:
- The COD for arms-length residential sales is several times higher than the 13.9% claimed by OPA.
- Homes with sale prices over $1million are assessed below market value.
- Homes with sale prices below $50,600 are assessed at more than twice their market value.
- Land on abated condominiums constitutes 7.5% of the total assessment, producing $6 million in tax savings for owners of these properties.
- Land is 2% or less of total assessment for the Residences at the Ritz-Carlton, 10 Rittenhouse, Symphony House, and 1706 Rittenhouse.
- The two dozen largest office buildings are assessed at 70-85% of their estimated market values, producing $9.5-$19 million for owners of these parcels.
- Single family homes are assessed at a higher price per square foot in 16 of the 18 zoning codes that contain both types of properties.
- In seven codes, the difference is more than 50%.
- OPA divided the City into 650 Geographic Market Areas, far too many for a City the size of Philadelphia.Assessments on vacant land parcels that have sold range from 70% to 136% of the sale price.
Data Analysis Chair Walt Spencer says the CCoT is willing to meet with the City’s Office of Property Assessment to review its findings.
“If OPA can demonstrate that our findings are incorrect, we will publicly apologize,” Spencer said. “However, if OPA cannot provide documentation to support its current assertions, I’m afraid that response will speak for itself.”
The group also wants City Council to denounce Mayor Nutter’s tax reform measure.
“We as council members have an opportunity to look at information,” said Councilman Mark Squilla of the first district. “We’ll either call to delay AVI again or look at other options to fix this.”
The Mayor’s Office claims the Coalition used “incomplete and inappropriate” data to get their figures. City Council has until the end of June to make a decision on AVI.