More than 26,000 Philadelphia property owners are challenging the city’s property valuations following a sharp rise in property tax bills this year.
But those most in need of help are the least likely to appeal.
The appeals process is intended as a vehicle for homeowners whose valuations do not reflect the market value of their property. The City or an independent judicial agency should review and adjust property values as necessary. But the Inquirer’s analysis of this year’s appeals data shows that fairness issues remain about who uses the system.
Owners of high value properties are more likely to appeal than those of low value properties.
However, owners of lower value properties generally have the greatest reason to file an appeal. This is because they are more likely to be systemically overvalued, resulting in a higher share of the tax burden in the first place.
Low-value properties are undervalued in complaints, so low-income homeowners miss the opportunity to correct city data and improve the accuracy of future valuations for themselves and their neighbors.
These findings add additional problems to an already unfair city evaluation process.
City’s latest evaluation round, Released in 2022, resulting in an average 31% increase in residential properties across the city from this yearThe City of Philadelphia emphasizes that its valuations meet industry standards for accuracy, but not all Philadelphia properties are properly rated. The Inquirer’s previous analysis found that the latest ratings were least accurate in low-income, black-majority neighborhoods in the city.
The Inquirer analyzed complaints data from 2014 onwards. At this time, the current challenging rating system was introduced. Here’s what we found.
Philadelphia receives the most property valuation appeals since 2014
In total, the city has received over 30,000 appeals. About 12,000 of these were filed with the Tax Reform Commission and about 20,000 with the Office of Asset Assessment.
OPA is responsible for assigning values to properties used to calculate tax amounts. The BRT is an independent oversight body that handles appeals only. About 5,000 appeals were filed simultaneously with both institutions.
The OPA’s decision may be overruled by the BRT. The reverse is not possible. Homeowners who obtain the desired results through OPA’s informal “first level review” process may withdraw their formal appeals to the BRT.
The city received its highest number of appeals under the current system in 2014, when Philadelphia implemented a controversial Real Value Initiative that significantly increased property values across the city. Before last year’s reassessment, OPA released its last new value citywide in 2019. A three-year gap has seen a surge in homeownership across the city.
Irregular valuations like this don’t just result in big spikes — Evaluations are less likely to be accurate and fair.
Most of the homeowners who filed appeals this year filed for the first time
Homes accounted for the overwhelming majority of appeals this year, with more than half being filed by homeowners who had never previously challenged an assessment.
This is consistent with what Monty Wilson attorney sees in his work with Community Legal Services, which helps low-income homeowners finalize their cases. The process can be complicated, Wilson said, requiring homeowners to identify comparable properties that have been valued or sold at a lower price. In the case of a BRT appeal, homeowners may need to present their case and defend their position before an attorney representing the city.
Wilson said Sticker shock from new ratings provoked the client to fight back.
The Inquirer’s analysis found that homeowners who filed complaints saw a spike in valuations across the city for homeowners who filed complaints. Homeowners who appealed saw an average increase of about 41% compared to about 31% for all homes in the city.
Owners of lower value properties were less likely to appeal, even though they had more reasons to appeal
Fifty-five percent of Philadelphia’s residential properties are worth less than $200,000, but those properties account for only 36% of the real estate appeals filed with the city.
This is especially notable as owners of lower value properties are more likely to have grounds for appeal. In a previous Inquirer analysis, Low-value properties are likely to be overvalued, that is, owners typically end up bearing more than their fair share of the tax burden. High-value properties, by contrast, are more likely to be undervalued, meaning the city is already undertaxing them.
The Tax Reform Commission said low-income homeowners may not appeal because of a tax relief program that limits tax increases if they do. Last year, officials beefed up the city’s most popular relief option, the Homestead Waiver, to offset skyrocketing valuations. (Many homeowners still stand to lose money By enrolling in the wrong program. )
“Many homeowners house exemption If they believe the market value is slightly off, please refrain from appealing,” said a BRT spokesperson. Appellants may be asked at the hearing whether they have a homestead exemption, and some may instead urge them to withdraw their appeals if the exemption can reduce their tax liability.
But the city’s chief assessor tells residents to appeal anyway. This is not just a matter of current tax law.
If a homeowner enrolled in the Relief Program passes a deed to a relative or for some reason becomes ineligible for the tax deduction, they will benefit from making sure the valuation is accurate. said James Aros Jr., the city’s Chief Appraisal Officer.
The appeal will also help the city get more accurate data and help evaluate other properties in the neighborhood.
“There are some improvements in data as property files [appeals,]Aros said:
Homeowners are more likely to appeal to the Office of Property Valuation than to the Tax Reform Board
This year, city officials encouraged owners to maximize their chances of success by appealing to both agencies, but only about 5,000 applicants applied.
The OPA has a simpler appeals process, does not require applicants to plead in public hearings, and attracts the highest number of applicants each year. The application and live hearing portion of the BRT process takes time.
However, the BRT is much more likely to accept appeals than the OPA. City Councilman David Oh advises voters to skip his OPA entirely.
“I don’t think it will help,” Oh said of the OPA appeal, adding that homeowners should focus on the most effective route.
Since 2014, OPA’s analysis shows that 65% of BRT appeals have resulted in a reduction in property valuation, compared to 26% of OPA’s previous cases. Pew Charitable Trust.
Part of the reason, Aros said, is that the BRT process requires more detail than the OPA.
Most people don’t know much about their appeal options, and even if they do, they may not know how to file a case, said Wilson, an attorney with Community Legal Services.
“You need to know what is considered proof of my high reputation. [to OPA], what should I say when I go before the Tax Reform Commission,” he said. “It doesn’t matter if you say my rating is too high.”
Both the OPA and the BRT have begun resolving appeals and will continue over the next few months.