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Tax Abatement
One of the most significant incentives for new housing
development and housing rehabilitation in the City of Philadelphia is the
10-year real estate tax abatement offered by the Board of Revision of Taxes
(BRT). To benefit from this offer developers and homeowners must follow
the guidelines set out by the BRT. They are described briefly below. Pay
particular attention to the timeframe.
For full details visit the BRT website brtweb.phila.gov
by clicking here or call 215-686-9270.
For a review of the impact of tax abatements in Philadelphia click here to visit the Fels Institute of Government website for the report Philadelphia Residential Tax Abatements, Accomplishments and Impacts and a supporting presentation. (Website is www.sas.upenn.edu/fels)
There are two major categories of tax abatements:
New construction of residential properties:
- Apply to the BRT no later than 60 days from the date
that the construction building permit was issued by Licenses and Inspection
(L&I).
- Construction must be an eligible unit located in a single
house, duplex, triplex, townhouse, rowhouse, apartment building, condominium
unit or cooperative unit.
- Abatement is for the improvement’s assessed valuation
and starts in the month following conveyance of the real estate to the
qualified owner.
Improvements to existing residential
properties:
- Apply to the BRT by Dec. 31 in the same year that the
building permit to construct is issued.
- Eligible residential property contains one or more dwelling
units or contains one or more dwelling units that is/are certified by
L&I or the Department of Health as unfit for human habitation, or
has been the subject of any order to be vacated, condemned or demolished
by reason of noncompliance with laws, ordinances or regulations of the
City of Philadelphia.
- Abatement is limited to the assessed value of the cost
of improvement and commences Jan.1 in the tax year immediately following
the year that the property improvement is certified complete.
The City offers short-term abatement
to developers of residential properties:
- Apply to the BRT by Dec. 31 in the same year that the
building permit to construct is issued.
- Abatement is limited to new or existing residential
real estate.
- Abatement is 100 percent of the value of the improvements,
beginning first day of the month after the month the building permit issued
by L&I.
- Abatement term up to 30 months or until property is
sold or transferred or occupied.
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