The mass confusion and consternation unleashed on the city in the wake of the AVI (Actual Value Initiative) assessments has all but drowned out actual information about what the AVI will mean to individual homeowners. The reality of the situation is far less hysteria-worthy than the studies and news stories suggest. Sit down, take a deep breath, and contemplate this simple AVI explanation.
First thing's first: the percentage by which your property assesment increased is not the percentage by which your tax bill will increase. This is because the tax bill calculation is getting overhauled alongside the assesments. The old method of calculating property taxes involved a "predetermined ratio," which was basically the percentage of your assesed property value that was taxed. The predetermined ratio for Philadelphia was 32%, but under AVI, that ratio will change to 100%. This does not necessarily mean your property taxes will increase, however, because tax rates will lower as the predetermined ratio goes up. Basically, the old method looked like this:
Assessed Property Value x 35% x Your Tax Rate = Your Tax Bill
The new method looks like this:
Assesed Property Value x Your (much lower) Tax Rate = Your Tax Bill
Though City Council has not yet decided on new tax rates, they will almost certainly (barring a total shift in City Hall) be significantly lower than current rates, in recognition of the fact that a greater percentage of the assessed value is getting taxed. The goal of AVI is to be more or less revenue neutral. Though you might see a 300% increase in the assessed value of your property, you shouldn't see a major hike in your taxes unless your property was woefully under assessed to begin with.
If you want to estimate your tax bill, the Office of Property Assessment has put together a handy calculator to make it even easier.
As more AVI news rolls in, hype and hysteria will likely follow, but most of it will be unwarranted.
· The Office of Property Assesment [Official Site]