Public Forum: Real Estate Taxes

by Joyce Smith

If you haven’t heard yet, the City passed legislation in October 2013 to help homeowners who are facing collection activity because of delinquent real estate taxes.

Tax

The new bill has created a more transparent and uniformed system for homeowners seeking to make payment arrangements. The highlights of the new bill includes a “Owner Occupied Payment Agreement” (OOPA) application that will be used by the City’s Department of Revenue and their collection agents: Linebarger, Blair & Goggan, and GRB.

The amount of a payment agreement will be based on homeowners’ level of income. OOPA offers two options.

  • Option 1 is set at an amount based on income. This is the best option for low income homeowners.
  • Option 2 is an individualized amount that will be based on household income and expenses.

(Most likely the monthly payment will be higher than Option 1) Where you fall on the income scale will determine if you will have a portion (a percentage of penalties and interest) of your tax bill forgiven. The very low income are entitled to the higher tax forgiveness amount.

All applicants must also show proof of residency such as a utility bill or driver’s license. But, everyone must remain in good standing on payment agreements for back taxes as well as future

But, what is new in this legislation is that for the first time non record owners or heirs will be allowed to get payment agreements. For example, if a granddaughter is living in her deceased grandmother’s property and needs an agreement to pay back taxes she will be allowed to get a payment agreement even though the deed is not in her name.

Prior to this bill, heirs could not get a formal agreement if the deed was not in their name because of the Tangled Title problem. (Applicants will need to submit documentation to show their relationship to the deceased’s property owner). This allows the applicant time to get assistance they need to transfer the deed into their name.

But, all the changes are not good. There will be harsher penalties for people who fall behind in their payment agreements. In the old system, people would make agreements, fall behind or stop making payments for awhile and then apply for a new agreement. Sometimes they would do this over and over. But, this will not be the case now.

Homeowners must stay current on their agreement and pay their annual taxes in a timely manner. If you fall behind there is a limited window of time to catch up before you breach your agreement. And, The City can resume collections and have the property sold at Sheriff Sale.

So, Philadelphia homeowners should try to stay current on their taxes, and get a formal agreement on back taxes if needed.

If you are behind in your taxes, you should look into getting a payment agreement. And, if you find your self in a position where you might miss a payment or fall behind on your formal arrangement you should contact the City (or their agent). Don’t wait until you breach your agreement. It won’t be the time to procrastinate……but, it will be the time to act proactively.

If you have any questions about the new legislation or facing collection or foreclosure activity you can call “Save Your Home Philly Hotline at 215- 334- HOME (4663)

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