PHILADELPHIA (KYW Newsradio) — Dramatic changes to Philadelphia’s 10-year property tax abatement are very likely on their way as a bill to slash the abatement gets a hearing in City Council Tuesday.
Council President Darrell Clarke proposed the changes with 14 co-sponsors, but that hasn’t stopped realtors and developers from lobbying for changes.
Discussions are likely to go on right up until Tuesday afternoon’s hearing.
Currently, 100% of real estate taxes on all new construction and renovation are abated for 10 years. Clarke’s bill would reduce that by 10% a year on new residential construction, making it worth about half of what it is now.
Clarke estimated it will bring in $300 million in additional revenue over the next 10 years.
A Department of Revenue analysis says the yearly increase will peak at $56 million dollars in 2030 but after that, it will decrease until, by 2040, there will be a loss of $15 million. Still, the Kenney administration is generally supportive of the bill.
If the bill advances Tuesday, it could be voted on before the end of the session. As introduced, it would take effect next July.
Council will also take testimony on an expansion of the homestead exemption that would essentially wipe out most of the new revenue that slashing the abatement would bring in. The Kenney administration is expected to ask Council to hold this bill and make it part of next year’s budget process.