Breaking Down The Tax Abatement

an in depth look at how the tax abatement works for new construction or a complete renovation

We originally wrote about this back in February of 2013, however, it is a question we hear over & over again from our clients. I thought that I could clarify further by using a few websites maintained by the city that are, in a very un-Philly fashion, quite clear & easy to use. You just need to know where to go.

what exactly is a tax abatement?

The tax abatement does NOT mean there are no property taxes. What is does mean is that the current tax assessment is frozen for 10 years as long as the developer is in good standing with the city & has applied for the abatement within the time requirements set forth by the city of Philadelphia.

scenario #1 – new construction from the ground up built on a vacant lot

The assessment will only include the tax on the land. The improvements will not be taxed for 10 years. Below is an example of an assessment from the O.P.A. (Office of Property Assessment & formerly the B.R.T.) for a new construction home we sold in 2014.**

what you need to know about the philadelphia tax abatement for new construction & completely renovated homes jordan brody realtor

Column #1-tax year 2015
Column #2-market value $379,500

Column #3-assessed land (taxable) $18,400
Column #4-assessed improvement (taxable) $0

Column #5-assessed land amount (exempt) $0
Column #6-assessed improvement (exempt) $361,000

Column #7-total assessment = market value

The buyer of this home is taxed on a land assessment of $18,400 & is exempt from paying taxes on improvements valued at $361,100 for 10 years.

At the current millage rate; 1.34% of $18,400 puts this annual tax bill at $246.56.

what you need to know about the philadelphia tax abatement for new construction & completely renovated homes jordan brody realtor

You can search for a real estate tax bill throughout the Department of Revenue here.

In 10 years if (big if) the total assessment of the property remains $379,500 & the city millage rate remains 1.34% the tax bill for this property will be $5,085.30. This is based on CURRENT INFORMATION. No one can predict the future. This is if everything stays exactly the same, which it more than likely won’t.

scenario #2-the complete renovation of an existing structure

Tax rates in this scenario tend to be a bit higher because the assessment is on the land AND any previous improvements. The new improvements will not be assessed for 10 years. Below is an example from the O.P.A. for a complete renovation we sold this past year.**

what you need to know about the philadelphia tax abatement for new construction & completely renovated homes jordan brody realtor

Column #1-tax year 2015
Column #2-market value $219,000

Column #3-assessed land (taxable) $14,667
Column #4-assessed improvement (taxable) $80,600

Column #5-assessed land (exempt) $0
Column #6-assessed improvement (exempt) $124,633

Column #7-total assessment=market value

The buyer of this home is being taxed on a land & improvements assessment of $14,667 & $80,600. The buyer is exempt from paying taxes for the new improvements in the amount of $124,633.

At the current millage rate; 1.34% of the total taxable assessment, which is $95,267, puts this annual tax bill at $1,276.58.

what you need to know about the philadelphia tax abatement for new construction & completely renovated homes jordan brody realtor

You can search for a real estate tax bill through the Department of Revenue here.

In 10 years if (again, big if) the total assessment of the property remains $219,900 & the city millage rate remains 1.34% the tax bill for this property will be $2,946,66. Again, this is based on CURRENT INFORMATION. No one can predict the future. This is if everything stays exactly the same, which it more than likely won’t.

**In the interest of privacy we did & will not disclose the addresses of the properties or the names of the clients we have used as examples.** 

Feel free to email us if you have any additional questions about the tax abatement or would like help finding a property that is being sold with a tax abatement.

search for homes with a tax abatement:

Price Range: $250,000 to $2,850,000 Price Average: $572,014
Size Range: 545 to 3,800 Sq. Ft. Size Average: 1,619 Sq. Ft.
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1 9 of 121
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Under Contract
Contingency
$ 575,000
1013 S 20TH STREET #2
Philadelphia, PA 19146
GRADUATE HOSPITAL
3 Bed / 3 Bath
0 Sq. Ft.
Property Type: Condo
MLS® #: 7205744
Courtesy of OCF Realty LLC
Under Contract
Contingency
$ 575,000
1013 S 20TH STREET #2 | Philadelphia, PA 19146
GRADUATE HOSPITAL
MLS® #
Property Type
Beds
Baths
Square Ft
7205744
Condo
3
3
0 s.f.
Courtesy of OCF Realty LLC
Gorgeous new construction bi-level condo conveniently located in Graduate Hospital! Location, location, location! Graduate Hospital is a great location for those seeking close proximity/walking distance to Center-City/Rittenhouse, South Street bridge, CHOP and U-Penn. Upper bi-level unit features 3beds 3 baths. First floor is open concept living room and kitchen. The kitchen has stainless still appliances, breakfast bar, modern warm grey cabinets, quart countertops with tear drop tile back splash. Also located on the main floor is one bedroom and full bath! The corner location creates so much more light with more available windows. Second floor features 2 bedrooms and 2 full baths. Master bedroom has an ensuite bath! Also on second floor is larger laundry room equipped with washer and dryer. Last but not least is the private roof deck access with superb, unobstructed views of Center City! PLEASE NOTE: TAX ABATEMENT PENDING, and CONDO FEES TBD. SEE LA FOR ANY ADDITIONAL QUESTIONS OR FLOOR PLANS.
Under Contract
Contingency
$ 525,000
1013 S 20TH STREET #1
Philadelphia, PA 19146
GRADUATE HOSPITAL
3 Bed / 3 Bath
0 Sq. Ft.
Property Type: Condo
MLS® #: 7205763
Courtesy of OCF Realty LLC
Under Contract
Contingency
$ 525,000
1013 S 20TH STREET #1 | Philadelphia, PA 19146
GRADUATE HOSPITAL
MLS® #
Property Type
Beds
Baths
Square Ft
7205763
Condo
3
3
0 s.f.
Courtesy of OCF Realty LLC
Gorgeous new construction bi-level condo conveniently located in Graduate Hospital! Location, location, location! Graduate Hospital is a great location for those seeking close proximity/walking distance to Center-City/Rittenhouse, South Street bridge, CHOP and U-Penn. Lower bi-level unit features 3beds 3 bath. First floor is open floor plan living room and eat in kitchen! Kitchen has stainless steel appliances, quartz countertops an island with under mounted sink and breakfast bar. You can also walk out the sliding doors to a lovely back patio. Patio will be enclosed with gate, perfect for grilling or outside storage. Also on the main floor is a one bedroom and full bath featuring tons of light with nice size closet. The lower level features 2 bedrooms , 2 full bathrooms and laundry closet. Master bedroom has 2 extra large closets and ensuite bathroom! PLEASE NOTE: TAX ABATEMENT PENDING, and CONDO FEES TBD. SEE LA FOR ANY ADDITIONAL QUESTIONS OR FLOOR PLANS
Under Contract
Contingency
$ 1,950,000
2 E CHESTNUT HILL AVENUE #2
Philadelphia, PA 19118
CHESTNUT HILL
3 Bed / 3/1 Bath
0 Sq. Ft.
Property Type: Condo
MLS® #: 7205447
Courtesy of BHHS Fox & Roach-Chestnut Hill
Under Contract
Contingency
$ 1,950,000
2 E CHESTNUT HILL AVENUE #2 | Philadelphia, PA 19118
CHESTNUT HILL
MLS® #
Property Type
Beds
Baths
Square Ft
7205447
Condo
3
3/1
0 s.f.
Courtesy of BHHS Fox & Roach-Chestnut Hill
Introducing 2 East - A truly exceptional restoration of an historic Mid-19th century renowned Chestnut Hill building into 2 unique residences brought to you by premier builder of Philadelphia Magazine Design Home. With all of the original historic details and integrity of this classic stone structure including soaring ceilings, exposed stone work and beams, original word work coupled with redesigned floor plans with all of the modern luxurious features for today's living make these truly special residences. This totally fabulous 3 BR/3.5 BA residence features an open-concept living area with chef's eat-in kitchen with Sub-Zero /Wolf appliances, custom cabinetry and mitered edge calcutta quartz counter tops including large island perfect for daily dining and entertaining. Lovely dining area plus family room perfect for today's living. Spacious formal living room with soaring ceilings. Hall powder room plus study with access to the most fabulous 500 square foot roof top deck with built-in planters and optional outdoor kitchen perfect for entertaining. Upstairs features luxurious master suite with spacious BR, walk-in closet with custom built-in systems. Lux spa-like Master Bathroom with custom double vanity, step-in steam shower plus soaking tub and separate water closet. 2 additional guest suites plus laundry room complete this floor. Additional lower level room with separate entrance adds approximately 300 sq ft of either living space home office/home gym or great for storage. Detached garage with optional car lift plus great enclosed grassy yard perfect for dog lovers. All new energy efficient systems including many green features including tank less hot water heater, soy based spray foam insulation. 10 year property tax abatement. Premier top of the hill location just a short stroll to train as well as all of the shops, restaurants and markets that this charming historic section of Philadelphia offers.
Under Contract
Contingency
$ 1,495,000
2 E CHESTNUT HILL AVENUE #1
Philadelphia, PA 19118
CHESTNUT HILL
3 Bed / 3/1 Bath
0 Sq. Ft.
Property Type: Condo
MLS® #: 7205439
Courtesy of BHHS Fox & Roach-Chestnut Hill
Under Contract
Contingency
$ 1,495,000
2 E CHESTNUT HILL AVENUE #1 | Philadelphia, PA 19118
CHESTNUT HILL
MLS® #
Property Type
Beds
Baths
Square Ft
7205439
Condo
3
3/1
0 s.f.
Courtesy of BHHS Fox & Roach-Chestnut Hill
Introducing 2 East - A truly exceptional restoration of an historic Mid-19th century renowned Chestnut Hill building into 2 unique residences brought to you by premier builder of Philadelphia Magazine Design Home. With all of the original historic details and integrity of this classic stone structure including soaring ceilings, exposed stone work and beams, original word work coupled with redesigned floor plans with all of the modern luxurious features for today's living make these truly special residences. This 3 BR/3.5 BA residence features a spacious living floor with living room with gas fireplace, dining room, open-concept Chef's Eat-in Kitchen with Sub-Zero /Wolf appliances, custom cabinetry and mitered edge calcutta quartz counter tops including large island perfect for daily dining and entertaining. Formal hall powder room plus large study with French doors leading to covered porch. Fabulous Master-suite with 25 x 16 Master Bedroom leads out to private terrace perfect for enjoying morning coffee. Walk-in closet with custom built-in systems. Lux spa-like Master Bathroom with custom double vanity, step-in steam shower plus soaking tub and separate water closet. Additional Bedroom suite overlooking another terrace perfect for entertaining. Finished lower level adds over 1k square feet of living space including perfect guest quarters with separate entrance including guest BR with en-suite bathroom plus media room/home office/play room/gym plus a full laundry room. Detached garage with optional car lift plus great enclosed grassy yard perfect for dog lovers. All new energy efficient systems including many green features including tank less hot water heater, soy based spray foam insulation. 10 year property tax abatement. Premier top of the hill location just a short stroll to train as well as all of the shops, restaurants and markets that this charming historic section of Philadelphia offers.
Under Contract
Contingency
$ 349,900
1815 WYLIE STREET #A
Philadelphia, PA 19130
FRANCISVILLE
2 Bed / 2 Bath
1,696 Sq. Ft.
Property Type: Condo
MLS® #: 7204474
Courtesy of Elfant Wissahickon-Chestnut Hill
Under Contract
Contingency
$ 349,900
1815 WYLIE STREET #A | Philadelphia, PA 19130
FRANCISVILLE
MLS® #
Property Type
Beds
Baths
Square Ft
7204474
Condo
2
2
1,696 s.f.
Courtesy of Elfant Wissahickon-Chestnut Hill
Located in the heart of Philadelphia's Francisville neighborhood, this 2 bedroom, 2 bathroom condo is ready for you to call it home. The property includes the remainder of the 10 yr. tax abatement, good through the end of 2025! Its main floor consists of an open concept kitchen, dining room, and living room, which is perfect for entertaining. The kitchen features stainless steel appliances, a center island, and quartz countertops. The main level also includes a full bathroom, a bedroom with a large closet, and access to a private rear patio. The lower level boasts an additional living space with sliding glass doors that lead you to a second outdoor space.The master suite has a desirable his-and-her closet and master bathroom with a tiled shower and glass doors. Included in the sale is a 1yr, prepaid parking space in the gated parking lot in the rear of the property. Additional features include a laundry room, Central Air, bamboo floors, floor to ceiling windows, a gas fireplace and high ceilings. Located steps from the Francisville Playground and a short walk to Fairmount Avenue's restaurants and shops. Come visit the Open House on Sunday, June 24th from 11:00a.m-1:00p.m.
Under Contract
Contingency
$ 1,393,600
23 S 23RD STREET #7B
Philadelphia, PA 19103
RITTENHOUSE SQUARE
3 Bed / 3/1 Bath
3,484 Sq. Ft.
Property Type: Condo
MLS® #: 7204068
Courtesy of Keller Williams Realty Center City
Under Contract
Contingency
$ 1,393,600
23 S 23RD STREET #7B | Philadelphia, PA 19103
RITTENHOUSE SQUARE
MLS® #
Property Type
Beds
Baths
Square Ft
7204068
Condo
3
3/1
3,484 s.f.
Courtesy of Keller Williams Realty Center City
Stunning bi-level PENTHOUSE with Tax abatement until 1/1/2021!! 1 of 2 Penthouses left offering 3 bedrooms & 3.5 baths plus Den/Family Room. Enter this magnificent residence thru double doors where you are greeted by a gorgeous open living/dining/kitchen combo space and tons of windows. 7B offers a terrific floor plan with exceptional indoor and outdoor entertaining areas and you never have to worry if you have enough space. As you enter you will find a wall of closets and hardwood floors throughout the first level. The spacious first floor features an outdoor patio with views to the west, a Powder Room, gourmet Chef's kitchen appointed with commercial grade Viking Stainless Steel appliances with a commercial gas range, stunning cherry cabinetry, granite countertops and an island with a second prep sink. The Kitchen is open to both the living and dining areas which also open to the terrace providing a great indoor/outdoor entertaining options. On the Second floor you'll find 3 amazing bedroom suites each with ensuite marble baths, soaring double height ceilings, and a washer and dryer making laundry convenient and easy. The sun-filled master suite with soaring ceilings, sun-filled views, a private balcony, incredible closets and dressing area, and en suite marble bathroom with glass frameless shower and separate bathtub. Second bedroom with marble ensuite bath also has a private balcony as well. Third bedroom also with ensuite marble bathroom with frameless glass shower. 23 offers a picturesque Common Area open-air atrium with waterfall and garden offering residents a private relaxation space. Residents of 23 S 23rd access is secured, complete with 24-hour doorman/security in addition to maintenance staff. You're just steps away from Rittenhouse Square, Greenfield Elementary, Amtrak 30th Street Station, Suburban Station, University of Penn, easy access to I-95 and I-76 highways. Parking is available for an additional fee.
Under Contract
Contingency
$ 265,000
1747 N MARSHALL STREET #2
Philadelphia, PA 19122
SOUTH KENSINGTON
2 Bed / 2 Bath
1,500 Sq. Ft.
Property Type: Condo
MLS® #: 7204126
Courtesy of Keller Williams Realty Center City
Under Contract
Contingency
$ 265,000
1747 N MARSHALL STREET #2 | Philadelphia, PA 19122
SOUTH KENSINGTON
MLS® #
Property Type
Beds
Baths
Square Ft
7204126
Condo
2
2
1,500 s.f.
Courtesy of Keller Williams Realty Center City
New Construction! Roof Deck! 10 Year Tax Abatement! 1747 N Marshall features 3 beautifully designed residential homes. Enter Unit 2 into a large open floor plan featuring a spacious Living & Dining Area and a modern Kitchen complete with quartz countertops, soft-close cabinetry, GE stainless steel appliances and much more! On the second floor you will find a Guest Bedroom with plenty of closet space, a Full Bath with designer tile throughout, a modern vanity and gorgeous fixtures! A conveniently located Laundry closet plus additional closet & storage space complete this floor. The third floor is an owners retreat! Featuring a large Master Bedroom, you will be thrilled to find 2 large closets plus a gorgeous En-Suite that includes an over-sized walk-in shower with designer tile. To complete this Master floor, there is a luxurious Wet Bar right by the staircase leading to your private Roof Deck! Enjoy many nights entertaining or relaxing in this great outdoor space with amazing city views. Streamline is proud to offer our buyers a 1 Year Builders Warranty plus the 10 Year Tax Abatement! **Tax Numbers & Condo Fees are estimates only.**
Under Contract
Contingency
$ 289,900
1201-15 FITZWATER STREET #307
Philadelphia, PA 19147
AVENUE OF THE ARTS
1 Bed / 1 Bath
610 Sq. Ft.
Property Type: Condo
MLS® #: 7202715
Courtesy of RE/MAX Regency Realty
Under Contract
Contingency
$ 289,900
1201-15 FITZWATER STREET #307 | Philadelphia, PA 19147
AVENUE OF THE ARTS
MLS® #
Property Type
Beds
Baths
Square Ft
7202715
Condo
1
1
610 s.f.
Courtesy of RE/MAX Regency Realty
Your Perfect Place! This bright and airy, one bedroom, one bath condo is located in The Hawthorne Building(on the National Register of Historic Places), and is in a great location! It's convenient to everything you'll want and has a 2-1/2 year tax abatement remaining! It features an upgraded, eat in kitchen with granite counter tops, ceramic tile back splash and Bosch and Samsung S/S appliances. There are restored hardwood floors on the 1st floor and new hardwood flooring in the 2nd floor bedroom. The 2 story living/great room features three 12' windows and a soaring 16' high ceiling with ceiling fan. The lux bathroom features upgraded ceramic tile flooring and tub wall, granite top sink with vanity and built in shelve alcove. The open bedroom on the second floor features new hardwood flooring, double closets, built in shelves and open views to the lower level. Where to park? No worries, amenities include one car deeded parking (an original $20,000 upgrade) in a gated lot! There is also a fitness center with full gym, a yoga studio, a steam room and sauna, laundry room, and a huge roof deck with gorgeous views of the city skyline, tables and chairs. The onsite community lounge features billiard tables. The Hawthorne is located in the Avenue of the Arts neighborhood, convenient to the Broad Street Line, so many restaurants, the Kimmel Center, Passyunk Square, City Hall, Hawthorne Park, the Italian Market, plenty of shopping, and entertainment and has a low condo fee. This will be your Perfect Place!
Under Contract
Contingency
$ 1,399,000
50 S 16TH STREET #5602
Philadelphia, PA 19102
RITTENHOUSE SQUARE
2 Bed / 2/1 Bath
1,701 Sq. Ft.
Property Type: Condo
MLS® #: 7204388
Courtesy of Kurfiss Sotheby's International Realty
Under Contract
Contingency
$ 1,399,000
50 S 16TH STREET #5602 | Philadelphia, PA 19102
RITTENHOUSE SQUARE
MLS® #
Property Type
Beds
Baths
Square Ft
7204388
Condo
2
2/1
1,701 s.f.
Courtesy of Kurfiss Sotheby's International Realty
Skytop penthouse on the 56th floor of the 58 story iconic Two Liberty tower. This exclusive penthouse has floor to ceiling windows with the expansive kitchen that opens to great room and dining area. Stellar views of the surrounding counties, NJ and Delaware, the horizon and colorful sunsets.Two Liberty is in the center of major employment centers - Comcast, Liberty One, Penn Center, University of Penn, Jefferson, Drexel, Temple and City Hall. The 37th floor amenities include an inspiring gym with views of the Delaware River, steam showers and saunas, endless pool, massage rooms, yoga studio, business center, board room, media center w billiards table, Sky Club, and direct access to the excellent R2L Daniel Stern's restaurant. 24 hour concierge service, chauffeur driven Mercedes town car. 10 year tax abatement starts the day of settlement. Pet friendly. 2 Liberty has the highest residential views, and every home has a water view. Seller pays Buyer's 2.05% transfer tax and 1st year of condo fees for a settlement on or before 9/30/2018. Tremendous savings to the Buyer.
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