City Council tax bill gives relief to homeowners, but buyers beware

Council approved increase in real estate transfer tax

Pat Loeb
May 23, 2018 - 8:09 pm



PHILADELPHIA (KYW Newsradio) — Philadelphia homebuyers would get squeezed by one tax bill advanced in City Council Wednesday, but homeowners would get relief from another. 

City Council approved three tax bills that the mayor requested. One was an increase in the real estate transfer tax, paid by homebuyers and sellers at closing. Another was an increase in the homestead exemption, which helps homeowners by exempting part of a home's value before taxes are calculated. 

The third reduces wage and business taxes, though the reductions are smaller than those previously adopted.

But council held off on approving the real estate tax increase to fund schools — and the mayor's budget itself.

Councilwoman Cindy Bass said they're working on alternatives.

"We think there might be some additional things we can do and to be responsible," she said. "We have to look at all of the options."

Over the objection of five members, council approved an increase in the real estate transfer tax from 3.1 percent — already one of the highest in the nation — to 3.45 percent. The revenue will be used to offset an increase in the homestead exemption.

With the increase, it would be the first $40,000, but Councilman Bobby Henon said it could be even more.

"We have time till the end of the budget for these ongoing conversations," he said, "but I would certainly be in favor of raising it up to $45,000."

"I adopt Councilman Henon's remarks, except amend his $45,000 to $50,000," added Councilman Brian O'Neill.

Finance Director Rob Dubow said the reduction in wage and business taxes is a good first step but hopes council will also adopt the real estate tax rate increase to fund schools.