City Council proposes $10K Homestead Exemption increase

homestead exemption
City Council President Kenyatta Johnson presides over a session Thursday, May 23.

City Council, in anticipation of a property reassessment this year, is considering expanding a popular tax relief program for homeowners.

Legislation introduced Thursday would set the Homestead Exemption at $90,000, an increase of $10,000. The benefit effectively reduces the taxable value of a property by that amount, and anyone living in an owner-occupied property can sign up for the exemption.

During the last reassessment, in 2022, residential valuations rose an average of 31%, and tax bills doubled or tripled for thousands of property owners. In response, then Mayor Jim Kenney and City Council agreed to an $80,000 exemption, up from $45,000.

Officials from Mayor Cherelle Parker’s administration have said a reassessment is planned in the coming months for the 2025 tax year; however, valuations have not yet been released.

“We’re waiting to see the numbers, and so we want to just be prepared,” Council President Kenyatta Johnson told Metro. “We want to make sure that as we address the issue of gentrification and, most importantly, the increase of property taxes, that individuals have some level of relief.”

Johnson co-introduced the legislation alongside longtime Northeast Philadelphia Council Member Brian O’Neill.

Another bill impacting property taxes – an assessment freeze for low-income homeowners – that was scheduled for a final vote Thursday was not considered and will likely be held until a municipal spending plan is finalized.

Longtime Northeast Philadelphia City Councilman Brian O’Neill, seen here during a session Thursday, May 23, co-sponsored the Homestead bill.JACK TOMCZUK

The legislation would refund or forgive any 2025 tax valuation increase for individuals earning $33,500 or less a year and couples making up to $41,500.

Both bills impact the revenue coming into the municipal government and are expected be considered as part of city budget negotiations. Changes are possible as lawmakers and the mayor’s team attempt to make the numbers work.

Parker and Council leaders must agree on a financial plan by the end of next month, in time for the start of the 2025 fiscal year on July 1.

Johnson said he did not have any data on how much the $10,000 Homestead Exemption increase would cost the city. The Reinvestment Fund has estimated that the low-income freeze would lead to a drop of around $4.5 million in municipal revenues for the next fiscal year.

Real estate tax dollars are divided between the city and the School District of Philadelphia.

Under the current exemption amount, most homeowners save about $1,120 a year as a result of participating in the program. Once someone signs up, they remain enrolled for future years without having to reapply.

Other city initiatives aimed at helping residents deal with assessment spikes include the senior citizen Real Estate Tax Freeze and the Long-Term Owner Occupants Program (LOOP).