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June 06, 2024

City Council backs low-income real estate tax relief, Mayor Cherelle Parker's budget

The legislation would help homeowners making under $33,000 annually as a single person or $41,5000 as a married couple.

Government City Council
low-income tax freeze Kate Frese/For PhillyVoice

A bill backed by City Council would offer property tax relief for homeowners making under $33,000 annually as a single person or $41,5000 as a married couple.

Philadelphia homeowners might get some relief in real estate taxes if their payments to the city prevent them from accessing basic needs. 

City Council voted unanimously Thursday in support of a low-income real estate tax freeze proposed by Councilmember Jamie Gauthier. Starting in 2025, the bill would keep taxes at the current rate or offer a refund, if necessary, for homeowners making under $33,000 annually as a single person or $41,5000 as a married couple. 

The bill awaits Mayor Cherelle Parker's signature, but she announced support for it in her 2025 budget, which was also initially approved early Thursday morning. 

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The legislation says that rising property values, and thus higher real estate taxes, can keep homeowners in poverty and deprive them of basic needs.  

"Homeownership is the foundation of the American dream," Gauthier said. "Dramatic property tax increases threaten to snatch generational wealth away from the Philadelphians who need it the most."

Eligibility is based on the state's Pharmaceutical Assistance Contract for the Elderly Needs Enhancement Tier, also known as PACENET, which helps residents pay for prescriptions. 

Philadelphia real estate taxes go to city government and the School District of Philadelphia. However, during a City Council meeting in May, Gauthier said that a conservative estimate on the cost of the low-income real estate tax freeze program was about $2.5 million, which she said is one of the smallest tax benefits in the city. She believes the benefits of the tax freeze outweigh the costs. 

"We have to be sure that we're not displacing Black and Brown homeowners because I don't know who else are going to go to school if we take them out of the city by levying property taxes that they cannot afford," Gauthier said. 

The council also approved a bill from Gauthier that gives further protections for residents using housing vouchers. 

This move comes after the council's Committee of the Whole, which includes all members, initially approved Parker's $6.4 billion 2025 budget early Thursday morning. The council will consider the budget for final approval next week. 

The budget includes $636 million for public safety, $477 million for cleaning and greening, $306 million for economic initiatives, $293 million for education and $100 million for housing. Notably, it sets aside funding to hire 400 new police officers, increase trash collection and add workforce development programs.

The budget, which stuck pretty close to Parker's March proposal, also includes $100 million for addiction treatment facilities. 

“I said in March, ‘don’t just listen to what I say, watch what we do.’ I hoped we would work together with diplomacy, diligence and purpose to implement a budget for the People of Philadelphia,” Parker said in a statement. “Today, we have shown the people we have done just that. This will be the standard operating procedure for my administration working with our partners in City Council, to serve all of Philadelphia.”