In a recent Philly.com article, it says the new tax property rate under AVI is tentatively projected to be 1.3% without a homestead exemption, or 1.4% with a $30,000 exemption.

Many people have been confused about what the Homestead Exemption is, and whether or not it would help or hurt them. Matt Ruben, President of the Northern Liberties Neighborhood Association, has taken the time to explain what it is and whether it will help or hurt you.

He also goes on to say "This is a separate issue from the larger problem of AVI increasing property tax bills because of large hikes in the assessed value of homes."

Here's Matt's easy to understand explanation of the Homestead Exemption:

(1) What Is the Homestead Exemption?

The Homestead Exemption exempts a portion of your assessed value - currently proposed to be $30k - from taxation, if the property is your primary residence. So with the Exemption, a home valued at $100k would be taxed only on $70k of that.

(2) How Could the Exemption Be a Bad Thing?

To pay for the lost revenue from the Exemption, the City has to set the property tax rate higher than it would be if there were no Exemption. For some homes, that will mean that the increased tax rate will outweigh any savings from the Exemption.

(3) How Do I know If the Exemption Will Help or Hurt Me?

Based on the above numbers, the "tipping point" is $420,000. If your home gets assessed at $420k, your bill will be the same with or without the Exemption (see example #3, below). If your home is assessed at less than $420k, the Exemption will save you some money. If your home is assessed at more than $420k, the Exemption will cost you some extra money.

View the examples that Matt provides that show the impact of the Exemption for assessed values that cover the range of what most Northern Liberties homeowners will see when the new assessments come out.