§ 19-1303.4. Authorization to Offer Exemption from Real Estate Taxes on New Construction of Residential Properties. 205

   (1)   Legislative Findings.

      (a)   The Council finds that:

         (.1)   The "Improvement of Deteriorating Real Property or Areas Tax Exemption Act", 1977, August 5, P.L. 167, No. 42, 72 P.S. §§ 4711-101 et seq., (hereinafter referred to as the "Act"), authorized local taxing authorities to exempt from real estate taxes the construction of certain new residential buildings in deteriorating areas under certain terms and conditions.

         (.2)   In accordance with the standards established by the Act, 72 P.S. § 4711-301, and based upon recommendations made in these standards and standards set forth in the act of May 24, 1945, P.L. 991, No. 385, 35 P.S. §§ 1701 et seq., known as the "Urban Redevelopment Law", for the determination of "blighted areas", and the Act of November 29, 1967, P.L. 636, No. 292, 62 P.S. §§ 2081 et seq., for the determination of "impoverished areas", as required by the Act, Council determines that the following areas of the City are "deteriorating areas" within the meaning of the Act:

            (.a)   The Council determines that all the wards of the City contain "Deteriorating Areas" as defined in Public Law 167, No. 42, enacted by the State Legislature in 1977, and codified as 72 P.S. §§ 4711-301 through 305, and are eligible for tax exemption under the Act.

         (.3)   The Act of May 22, 1933, P.L. 853, No. 155, as amended (hereinafter the "Temporary Tax Exemption Act"), has been amended to further provide for the temporary tax exemption for residential construction for a period not to exceed thirty (30) months from the first day of the month after which a building permit is issued or until occupied or conveyed to a bona fide purchaser.

   (2)   Definitions.

      (a)   Dwelling unit means a room or group of rooms located within a dwelling and forming a single habitable unit with facilities which are used or intended to be used for living, sleeping, cooking and eating.

      (b)   Residential construction means the building or erection of dwelling units, as defined above, upon vacant land or land specifically prepared to receive such structures.

      (c)   Eligible dwelling unit means a dwelling unit located in a single house, double house, duplex, townhouse, row house, apartment building, condominium unit or cooperative unit. 206

      (d)   Reporting period shall mean, for the first report submitted pursuant to subsection 19-1303.4(8), the period from February 1, 1983 to December 31, 1984, and for subsequent such reports, the calendar year immediately following the period covered by the most recent report.

      (e)   Applicant means any person who applies for a building permit or tax exemption pursuant to this Section, and, when the application and implementation of this Section so indicates, a builder, developer, taxpayer or other appropriate interested party.

      (f)   Delinquent City and School District of Philadelphia taxes, charges, fees, rents or claims. All City and School District of Philadelphia taxes, charges, fees, rents or claims not paid when due (including the failure of any employer to pay over to the City any wage taxes that were collected, or that should have been collected but for misclassification of workers) whether or not liens for such have been filed in the office of the prothonotary of the county, and shall include all penalties, additions, interest, and costs due on such delinquent taxes, charges, fees, rents or claims. 207

   (3)   Authorization of Exemptions.

      (a)   Persons undertaking residential construction of new dwelling units within the definition contained in this Section within any of the foregoing eligible areas, may apply for, and the Board of Revision of Taxes may grant, a real estate tax exemption upon such new residential construction in the amount and in the manner hereinafter provided on the condition that any exemption granted by the Board of Revision of Taxes shall be contingent upon the payment of delinquent taxes, charges, fees, rents or claims or compliance with any agreement to pay that he may have entered into pursuant hereto. 208

      (b)   The Board of Revision of Taxes shall extend to ten (10) years the term of any three (3) year real estate tax exemption issued pursuant to this Section 19-1303.4 upon any new residential construction for which a certificate of occupancy was issued after October 27, 1999. 209

   (4)   Exemption Amount.

      (a)   The exemption from real estate taxes shall be limited to that portion of the assessment valuation attributable to the cost of construction of the new eligible dwelling unit. 210

      (b)   The exemption from real estate taxes shall be limited to that construction for which an exemption has been requested in the manner set forth below, and for which a separate assessment has been made by the Board of Revision of Taxes.

   (5)   Exemption Schedule. 211

      (a)   With respect to applications for exemption initially applied for on or before December 31, 2021, one hundred percent (100%) of the assessable amount of the construction costs shall be exempted from real estate taxes for a period of ten years immediately following the date on which settlement is made, and a required certificate of use and occupancy is issued on an eligible dwelling unit. After the tenth year, the exemption shall terminate.

      (b)   With respect to applications for exemption initially applied for after December 31, 2021, the assessable amount of the construction costs shall be exempted from real estate taxes for a period of ten years immediately following the date on which settlement is made, and a required certificate of use and occupancy is issued on an eligible dwelling unit, as follows: one hundred percent (100%) of the assessable amount of the construction costs shall be exempted in the first year; ninety percent (90%) in the second year; eighty percent (80%) in the third year; seventy percent (70%) in the fourth year; sixty percent (60%) in the fifth year; fifty percent (50%) in the sixth year; forty percent (40%) in the seventh year; thirty percent (30%) in the eighth year; twenty percent (20%) in the ninth year; and ten percent (10%) in the tenth year. After the tenth year, the exemption shall terminate.

      (c)   The exemption from taxes granted under this ordinance shall be upon the property and shall not terminate upon the sale or exchange of the property, so long as the dwelling units retain their eligibility.

      (d)   If an eligible dwelling unit is granted tax exemption pursuant to this ordinance, the value of the improvement shall not, during the exemption period, be considered as a factor in assessing the value of other properties in the same area.

   (6)   Procedure for Obtaining Exemption.

      (a)   At the time a building permit for residential construction is applied for, the Department of Licenses and Inspections shall notify the applicant by a printed notice of the possibility of a tax exemption under this ordinance. Within sixty (60) days of the date that the building permit is issued, or within 365 days of the date that the certificate of occupancy of the property is issued provided that the certificate of occupancy is issued after March 1, 2000 and prior to June 30, 2002, the applicant shall apply to the Board of Revision of Taxes for an exemption. The application shall be upon forms prescribed by the Board of Revision of Taxes and must be filed within the specified time period. 212

      (b)   The Board of Revision of Taxes shall determine whether the exemption shall be granted. The Board of Revision of Taxes shall forward a copy of the approved request for exemption to the applicant. At the same time, the Board of Revision of Taxes shall notify the applicant that the grant of exemption is contingent upon the payment of delinquent taxes, charges, fees, rents or claims. 213

      (c)   The Board of Revision of Taxes in determining whether the exemption shall be granted shall inquire of the Department of Revenue of the City of Philadelphia whether the taxpayer is indebted to the City of Philadelphia or School District of Philadelphia for or on account of any delinquent taxes, charges, fees, rents or claims. The taxpayer shall provide to the Department such documentation as the Department shall require in order to determine whether there is any delinquency, including whether the taxpayer has paid over to the City all required wage taxes. The Board of Revision of Taxes shall withhold approval of the application until the taxpayer pays or enters into an agreement with the City of Philadelphia to pay the tax, charge, fee, rent or claim. The Board of Revision of Taxes shall withdraw approval where the taxpayer fails to pay delinquent taxes, charges, fees, rents or claims during the exemption period for failure to comply with his agreement to pay as provided herein. Any withholding or withdrawal of the exemption by the Board of Revision of Taxes pursuant to this subsection shall not be construed to stay the tolling of the exemption period for which a taxpayer would otherwise qualify. 214

      (d)   Upon completion of the construction, the applicant shall notify the Board of Revision of Taxes, so that the Board may assess the construction for the purpose of calculating the amount of assessment eligible for exemption. In order to determine the assessment valuation attributable to the cost of construction of the new eligible dwelling unit, the Board of Revision of Taxes shall assess separately the dwelling unit and the land upon which the new residential construction stands. 215

      (e)   The Board of Revision of Taxes shall notify the applicant of the amount of assessment eligible for exemption. 216

      (f)   In no event shall an exemption be granted for an eligible dwelling unit which has obtained and used, in whole or in part, another exemption under this Chapter. 217

      (g)   Appeals from the reassessment and the determination of the amount eligible for exemption may be taken by the City or by the applicant as provided by law. 218

   (7)   Reserved. 219

   (8)   Information Reports. The Board of Revision of Taxes shall report to the Council and the Mayor no later than March 1 of each year commencing in 1986:

      (a)   The number of tax exemption requests submitted and granted under this Section during the reporting period;

      (b)   The total assessed value of all land, and construction thereon, regarding which exemption under this Section has been granted in the reporting period, and the amount of such value which is exempted;

      (c)   The total assessed value of all land, and construction thereon, regarding which exemption under this Section is in effect at the end of the reporting period and the amount of such value which is exempt at the end of such period;

      (d)   For each property for which exemption is in effect during the reporting period:

         (.1)   the address, ward and census tract where the property is located;

         (.2)   the previous address of the exempt property owner;

         (.3)   the assessed value of the land and construction thereon for each year that the exemption has been in effect;

         (.4)   the amount of assessed valuation for which exemption has been granted;

         (.5)   the sales price for each sale of the property or any exempt dwelling unit thereon, for each sale of the property, during the period in which the exemption has been in effect.

   The Board may require of parties exempt under this Section such annual reports as may be necessary for the Board to fulfill its duties under this subsection. The Board shall have the authority to terminate a tax exemption on the failure of an exempt party to submit such report as required.

   (9)   Reserved. 220

   (10)   Severability. If any sentence, clause, section or part of this ordinance is for any reason found to be unconstitutional, illegal or invalid, such unconstitutionality, illegality or invalidity shall not affect or impair any of the remaining provisions, sentences, clauses, sections or parts of this ordinance. It is hereby declared as the intent of the City Council that this ordinance would have been adopted had such unconstitutional, illegal or invalid sentence, clause, section or part thereof been included herein.

   (11)   Periodic Evaluation Requirement. At least once every three years, beginning with the year 2024, the Council shall, by separate ordinance, select an independent expert to evaluate the specific impact on the real estate market of the modification made by subsection 19-1303.4(5)(b) to the exemption authorized by Section 19-1303.4. The expert shall also comprehensively evaluate the overall impact of the exemptions for commercial and residential construction authorized by Sections 19-1303.2, 19-1303.3 and 19-1303.4, including the extent to which taxpayers who are delinquent in any City taxes are nonetheless receiving exemptions, and shall submit recommendations for any modifications to those exemptions. The expert engaged for this purpose shall be selected pursuant to the procedure set forth in Chapter 17-1400 for the awarding of non-competitively bid contracts. Final copies of the report shall be provided to the Mayor, each member of Council, and to the Clerk of Council, who shall see to it that a copy is posted on the City's official internet site.  221

 

Notes

205	Added, 1983 Ordinances, p. 49; amended and new subsections added, 1985 Ordinances, p. 9. Enrolled bill numbered this as Section 19-1303(4); renumbered by Code editor.
206	Amended, Bill No. 000064 (approved October 31, 2000). Section 2 of Bill No. 000064 reads as follows: "Effective Date; Application. This Ordinance shall take effect immediately, and shall apply only to exemptions for which application is made to the Board of Revision of Taxes on or after such effective date."
207	Added, 1987 Ordinances, p. 302; amended, 1987 Ordinances, p. 1227. Enrolled Bill Nos. 1202 and 1368 (1987 Ordinances, pp. 302 and 1227) both read "(5)"; renumbered by Code editor. Amended, Bill No. 200573 (approved January 20, 2021).
208	Amended, 1987 Ordinances, pp. 302 and 1227; amended, Bill No. 000064 (approved October 31, 2000). Section 2 of Bill No. 000064 reads as follows: "Effective Date; Application. This Ordinance shall take effect immediately, and shall apply only to exemptions for which application is made to the Board of Revision of Taxes on or after such effective date."
209	Added, Bill No. 020647 (became law April 10, 2003).
210	Amended, 1990 Ordinances, p. 742 (effective July 1, 1990).
211	Amended, 1987 Ordinances, p. 1491; amended, Bill No. 970214 (approved December 9, 1999); amended, Bill No. 000226 (approved September 12, 2000), effective upon state authorization from Act of October 18, 2000, P.L. 613, No. 83, effective in 60 days; amended, Bill No. 190944-A (approved December 30, 2019). Enrolled bill added a subsection but failed to renumber subsequent subsections; renumbered by Code editor. Amended, Bill No. 200366 (approved December 15, 2020).
212	Amended, Bill No. 010508 (approved November 14, 2001).
213	Amended, 1987 Ordinances, pp. 302 and 1227; amended, Bill No. 000064 (approved October 31, 2000). Section 2 of Bill No. 000064 reads as follows: "Effective Date; Application. This Ordinance shall take effect immediately, and shall apply only to exemptions for which application is made to the Board of Revision of Taxes on or after such effective date."
214	Added, 1987 Ordinances, p. 302; amended, 1987 Ordinances, p. 1227; amended, Bill No. 200573 (approved January 20, 2021).
215	Renumbered, 1987 Ordinances, p. 302.
216	Renumbered, 1987 Ordinances, p. 302.
217	Renumbered, 1987 Ordinances, p. 302.
218	Renumbered, 1987 Ordinances, p. 302.
219	Amended, 1987 Ordinances, pp. 302 and 1227; amended, Bill No. 000064 (approved October 31, 2000). Section 2 of Bill No. 000064 reads as follows: "Effective Date; Application. This Ordinance shall take effect immediately, and shall apply only to exemptions for which application is made to the Board of Revision of Taxes on or after such effective date."
220	Amended, 1990 Ordinances, p. 742; deleted, Bill No. 190944-A (approved December 30, 2019).
221	Added, Bill No. 190944-A (approved December 30, 2019); amended, Bill No. 200573 (approved January 20, 2021).