The Council of the City of Philadelphia finds that:
(1) There are business, economic and tax reasons for entities holding real estate to do business as corporations or associations.
(2) Under Federal, State and City laws, corporations and associations are entities separate from their members, partners, stockholders or shareholders.
(3) Entities holding real estate can effectively transfer equitable ownership in real estate by means other than by deed.
(4) Entities can effectively transfer equitable ownership in real estate by selling corporate stock, selling partnership interests, leasing real estate for a period of time, merging with another entity, or liquidating the entity.
(5) It is the intent of City Council to tax the transfer of the ownership of real estate situate in Philadelphia whether such transfer occurs in fact or equitably being the transfer of stock or shares of an acquired real estate company.
(1) Association. A partnership, limited partnership, or any other form of unincorporated enterprise owned or conducted by two or more persons other than a private trust or decedent's estate.
(2) Certificate of transfer. An instrument representing the transfer of equitable ownership in real estate situate in Philadelphia.
(3) City. The City of Philadelphia.
(4) Corporation. A corporation, joint-stock association, business trust, or banking institution which is organized under the laws of this Commonwealth, the United States, or any other state, territory, foreign country or dependency.
(5) Department. The Department of Revenue of the City of Philadelphia.
(6) Document. 265 Any deed, instrument or writing which conveys, transfers, demises, vests, confirms or evidences any transfer or demise of title to real estate situate in Philadelphia presented for recording, but does not include wills, mortgages, deeds of trust or other instruments of like character given as security for a debt and deeds of release thereof to the debtor, land contracts whereby the legal title does not pass to the grantee until the total consideration specified in the contract has been paid or any cancellation unless the land contract is deemed a capital lease pursuant to subsection 19-1402(12)(b)(.1), or instruments which solely grant, vest or confirm a public utility easement. "Document" shall also include a Certificate of Transfer required to be presented for recording under this Chapter.
(7) Family farm corporation. A corporation of which at least seventy-five percent (75%) of its assets are devoted to the business of agriculture and at least seventy-five percent (75%) of each class of stock of the corporation is continuously owned by members of the same family. The business of agriculture shall not be deemed to include:
(a) Recreational activities such as, but not limited to, hunting, fishing, camping, skiing, show competition or racing;
(b) The raising, breeding or training of game animals or game birds, fish, cats, dogs or pets or animals intended for use in sporting or recreational activities;
(c) Fur farming;
(d) Stockyard and slaughterhouse operations; or
(e) Manufacturing or processing operations of any kind.
(7.1) Financially interdependent persons. Persons who live together as a single household and who, for at least six months, have agreed to share the common necessities of life and to be responsible for each other's common welfare. 266
(8) Members of the same family. Any individual, such individual's brothers and sisters, the brothers and sisters of such individual's parents and grandparents, the ancestors and lineal descendants of any of the foregoing, a spouse of any of the foregoing, and the estate of any of the foregoing. Individuals related by the halfblood or legal adoption shall be treated as if they were related by the wholeblood.
(9) Person. Every natural person, association, or corporation. Whenever used in any clause prescribing and imposing a fine or imprisonment, or both, the term "person" as applied to associations, shall include the responsible members or general partners thereof, and as applied to corporations, the officers thereof.
(10) Real estate.
(a) All lands, tenements or hereditaments within this City, including without limitation, buildings, structures, fixtures, mines, minerals, oil, gas, quarries, spaces with or without upper or lower boundaries, trees, and other improvements, immovables or interests which by custom, usage or law pass with a conveyance or land, but excluding permanently attached machinery and equipment in an industrial plant.
(b) A condominium unit.
(c) A tenant-stockholder's interest in a cooperative housing corporation, trust or association under a proprietary lease or occupancy agreement, except interest excluded under Section 19-1405.
(a) A corporation or association which is primarily engaged in the business of holding, selling or leasing real estate, ninety percent (90%) or more of the ownership interest in which is held by thirty-five or fewer persons and which:
(.1) derives sixty percent (60%) or more of its annual gross receipts from the ownership or disposition of real estate or title to real estate; or 268
(.2) holds real estate or title to real estate, the value of which comprises fifty percent (50%) or more of the value of its entire tangible asset holdings exclusive of tangible assets which are freely transferable and actively traded on an established market; or 269
(b) A corporation or association which holds, directly or indirectly, as ninety percent (90%) or more of the value of its assets, an interest in a real estate company.
(c) For purposes of this definition only, real estate shall not be limited to interests located within this City.
(a) Any interest in real estate which endures for a period of time, the termination of which is not fixed or ascertained by a specific number of years, including without limitation, an estate in fee simple, life estate, or perpetual leasehold; or
(b) Any interest in real estate enduring for a fixed period of years but which, either by reason of the length of the term of the grant of a right to extend the term by renewal or otherwise, consists of a group of rights approximating those of an estate in fee simple, life estate or perpetual leasehold, including without limitation a leasehold interest or possessory interest under a lease or occupancy agreement for a term of thirty (30) years or more or a leasehold interest or possessory interest in real estate in which the lessee has equity.
(.1) Extension of Lease – In determining the term of a lease, it shall be presumed that a right or option to renew or extend a lease will be exercised if the rental charge to the lessee is fixed or if a method for calculating the rental charge is established.
(13) Transaction. The making, executing, delivering, accepting, or presenting for recording of a document.
(a) In the case of any bona fide sale of real estate at arm's length for actual monetary worth, the amount of the actual consideration therefor, paid or to be paid; Provided, that where such documents to be recorded shall set forth a nominal consideration, the "value" thereof shall be determined from the price set forth in or actual consideration for the contract of sale; 272
(b) In the case of a gift of real estate where the transfer is not arms length, sale by execution upon a judgment or upon the foreclosure of a mortgage by a judicial officer, or upon a deed in lieu of foreclosure, transactions without consideration or for consideration less than the actual monetary worth of the real estate, a lease subject to tax pursuant to subsection 19-1402(12)(b), an occupancy agreement, a leasehold or possessory interest, any exchange of properties, a transfer by merger, consolidation, or acquisition, a transfer effectuated pursuant to a plan of liquidation and dissolution, or the real estate of an acquired real estate company that is a family farm corporation, the actual monetary worth of the real estate as determined by adjusting the assessed value of the real estate, as determined by the Board of Revision of Taxes for City real estate tax purposes, for the common level ratio factor for the City as established by the State Tax Equalization Board: Provided, that the value of real estate shall never be less than the readily ascertainable market value of any property (including cash) for which the real estate is exchanged; and provided, further, that this subsection (b) shall not apply to any exchange of real estate exclusively for property (including cash) with a readily ascertainable fair market value; 273
(c) In the case of an easement or other interest in real estate the value of which is not determinable under subsection (a) or (b), the actual monetary worth of such interest; or
(d) The actual consideration for or actual monetary worth of any executory agreement for the construction of buildings, structures or other permanent improvements to real estate between the grantor and other persons existing before the transfer and not removed thereby or between the grantor, the agent or principal of the grantor or a related corporation, association or partnership and the grantee existing before or effective with the transfer.
(e) In the case of the real estate of an acquired real estate company other than a family farm corporation, the monetary value of the real estate directly or indirectly held by the company. Where the change in ownership is part of a bona fide arm's length sale, there shall be a rebuttable presumption that the monetary value is the actual consideration paid for the company, provided that the taxpayer may rebut that presumption by alternative proof of the actual value of the included real estate. 274
(f) As used in this subsection (14) ("Value"), the term "actual consideration" shall include any liens or other encumbrances on the real estate existing before the transfer and not removed thereby, whether or not the underlying indebtedness is assumed, and ground rents, or a commensurate part thereof where such liens or other encumbrances and ground rents also encumber or are charged against other real estate. 275
Notes
| 265 | Amended, 1988 Ordinances, p. 333. |
| 266 | Added, Bill No. 070541 (approved November 15, 2007). |
| 267 | Amended, 1988 Ordinances, p. 333; amended, Bill No. 960397 (approved July 5, 1996), 1996 Ordinances, p. 612; amended, Bill No. 980303 (approved December 9, 1999). Section 2 of Bill No. 980303 states: "This Ordinance shall be effective for all transactions taking place on or after July 1, 2000." |
| 268 | Amended, Bill No. 160810 (approved December 20, 2016), effective July 1, 2017. |
| 269 | Amended, Bill No. 160810 (approved December 20, 2016), effective July 1, 2017. |
| 270 | Amended, 1988 Ordinances, p. 333; amended, 1993 Ordinances, p. 920. |
| 271 | Amended, 1988 Ordinances, p. 333. |
| 272 | Amended, Bill No. 190135 (approved May 15, 2019). |
| 273 | |
| 274 | Added, Bill No. 160810 (approved December 20, 2016), effective July 1, 2017. |
| 275 | Added, Bill No. 190135 (approved May 15, 2019). |
(1) Every person who transfers ownership of real estate situate within the City or who makes, executes, delivers, accepts or presents for recording any document or in whose behalf any document is made, executed, delivered, accepted or presented for recording, or who accepts ownership of real estate situate within the City, shall be subject to pay for and in respect to the transaction or any part thereof, or for or in respect of the vellum parchment or paper upon which such document is written or printed, a tax based on the value of the real estate represented by such document, which tax shall be payable at the earlier of the time the document is presented for recording or within thirty (30) days of acceptance of such document or within thirty (30) days of becoming an acquired real estate company or family farm corporation. For documents made, executed, delivered or accepted or presented for recording during each of the following fiscal years, the amount of tax shall be computed by multiplying the value of the real estate represented by such document by the following rates of tax: 277
(a) four and seven hundredths percent (4.07%) for the fiscal year of the City commencing July 1, 1988 and ending June 30, 1989; Provided that, in the event that a court of competent jurisdiction enters a final order from which all appeals have been exhausted, determining that City Council lacked the authority to impose this rate effective July 1, 1988, the rate shall revert to two and one-half percent (2.5%) for the fiscal year commencing July 1, 1988 and ending June 30, 1989;
(b) four and seven hundredths percent (4.07%) for the fiscal year of the City commencing July 1, 1989 and ending June 30, 1990;
(c) three and ninety-two hundredths percent (3.92%) for the fiscal year of the City commencing July 1, 1990 and ending June 30, 1991;
(d) three and sixty-nine hundredths percent (3.69%) for the fiscal year of the City commencing July 1, 1991 and ending June 30, 1992;
(e) three and forty-six hundredths percent (3.46%) for the fiscal year of the City commencing July 1, 1992 and ending June 30, 1993;
(f) three and twenty-three hundredths percent (3.23%) for the fiscal year of the City commencing July 1, 1993 and ending June 30, 1994;
(g) three percent (3%) for the fiscal years of the City commencing July 1, 1994 and ending June 30, 2016, and for the period commencing July 1, 2016 and ending December 31, 2016;
(h) three and one tenth percent (3.1%) for the period commencing January 1, 2017 and ending June 30, 2018; and
(i) three and two hundred seventy-eight thousandths percent (3.278%) for the period commencing July 1, 2018, and ending December 31, 2036; and
(j) three and one hundred seventy-eight thousandths percent (3.178%) for the period commencing January 1, 2037 and thereafter.
(a) Definitions. As used in this section, the words and phrases shall mean the following unless the context clearly indicates otherwise:
(.1) Blighted property. A property which meets at least three of the criteria listed under Section 5(d)(5) of the Act of November 26, 2008, P.L. 1672, No. 135, known as the Abandoned and Blighted Property Conservatorship Act, as determined by the Department of Licenses and Inspections.
(.2) Philadelphia County Demolition Fund. A City fund used exclusively for the demolition of blighted properties for the purpose of increasing economic development situated in the City and County of Philadelphia, created in accordance with and maintained pursuant to Section 2.2 of the Act of April 8, 1982, P.L. 310, No. 87, as amended, known as the Recorder of Deeds Fee Law.
(b) In addition to the tax collected under subsection (1) of this section, every person who transfers ownership of real estate situate within the City or who makes, executes, delivers, accepts or presents for recording any deed or mortgage or in whose behalf any deed or mortgage is made, executed, delivered, accepted or presented for recording, or who accepts ownership of real estate situate within the City, shall be subject to pay a Philadelphia County Demolition Fund fee of fifteen dollars ($15), which fee shall be payable at the earlier of the time the document is presented for recording or within thirty (30) days of acceptance of such document or within thirty (30) days of becoming an acquired real estate company or family farm corporation.
(c) The fees collected under subsection (2)(b) shall be deposited into a separately maintained City fund known as the Philadelphia County Demolition Fund and shall be used exclusively for the demolition of blighted properties for the purpose of increasing economic development.
(d) Within ninety (90) days of start of collection of fees pursuant to this subsection, the Mayor shall cause an initial report to be filed with the Pennsylvania Department of Community and Economic Development. The initial report shall include an explanation of the Mayor's plan for how the fees collected pursuant to this section will be spent, the number of properties likely to be demolished, and any other relevant information.
(e) Within twelve (12) months of start of collection of fees pursuant to this subsection, and annually thereafter, the Mayor shall cause an annual report to be filed with the Pennsylvania Department of Community and Economic Development. The annual report shall include the number of properties demolished, the cost of demolition per property, and any other relevant information.
(f) The fees imposed under subsection (2)(b) of this section are authorized pursuant to Section 2.2 of the Act of April 8, 1982, P.L. 310, No. 87, as amended, 42 P.S. § 21052.2, known as the Recorder of Deeds Fee Law, and shall only be collectable pursuant to the grant of authority under such portion of that Act, which by its current terms is scheduled to expire January 3, 2027, or pursuant to any successor acts.
(g) No fees shall be collected under subsection (2)(b) unless and until the Finance Director has certified to the Recorder of Deeds and the Chief Clerk of Council that the Philadelphia County Demolition Fund has been established by the City and, in no event, no earlier than sixty (60) days from the date of adoption of the ordinance adding this subsection 19-1403(2) to the Code.
(3) The payment of the tax and fee imposed herein shall be evidenced by the affixing of an official stamp or writing by the recorder whereon the date of the payment of the tax and fee, amount of the tax and fee and the signature of the collecting agent shall be set forth. 279
Notes
| 276 | Amended, 1988 Ordinances, p. 695 (Bill No. 164). Section 2 of Bill No. 164 states: "This Ordinance shall be effective July 1, 1988 and shall apply to any document made, executed, delivered or accepted or presented for recording on or after July 1, 1988." Amended, 1989 Ordinances, p. 773 (Bill No. 440). Section 2 of Bill No. 440 includes certain effective date provisions in the event of litigation. See City of Philadelphia v. Weiner, 121 Pa. Commw. 139, 550 A.2d 274 (1989), appeal denied; Haas v. Philadelphia Dept. of Revenue, No. 7152 October Term 1989 (Philadelphia Court of Common Pleas). Caption amended,
Bill No. 220288 (approved June 27, 2022). |
| 277 | |
| 278 | |
| 279 |
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