Property taxes in Pennsylvania are relatively high on a national scale. According to the Tax Foundation, Pennsylvania ranked 11th in the U.S. in 2008 in terms of property taxes paid as a percentage of home value (1.34%) and 12th in the country in terms of property taxes as a percentage of income (3.55%).
The Pennsylvania Taxpayer Relief Act of 2006 provided homeowners some guarantees. Homeowners in every school district in Pennsylvania can benefit from property tax relief funded by the state from gaming revenues. And homeowners are protected from extraordinary school district property tax increases through a fair referendum requirement for voter approval. The Act also expanded the Property Tax and Rent Rebate Program for seniors.
According to the Pennsylvania Governor’s Office, homeowners will receive nearly $770 million in property tax relief in 2009, funded by gaming revenues. The Governor’s Office reports that about 110,000 seniors will pay no school property taxes and many more will receive rebates of up to $975, in addition to the property tax relief received by all homeowners.
Homestead and farmstead exemptions
Pennsylvania residents can qualify for a homestead exemption on their permanent primary residence. Farmers can qualify for a farmstead exemption on building used for agricultural purposes. The farm must be at least 10 contiguous acres and must be the primary residence of the owner. Farmers in Pennsylvania can qualify for both a homestead exemption and a farmstead exemption.
The homestead and farmstead exemptions reduce the assessed value of the property by a certain fixed amount for property tax purposes. To initially apply for these exemptions you need to submit an application to your county tax assessor. You can find links to the websites of the county tax assessors on Assessor Links USA. The deadline for filing the application is March 31. If you acquire property after March 31 you have to wait until the following year to qualify for the homestead and farmstead exemptions. If you are already approved for an exemption you cannot be required to resubmit your application more than once every three years.
According to the Pennsylvania Department of Education, the amount of property tax relief varies from one school district to another. This depends on whether the taxpayers approve a local income tax increase to offset the property tax relief and whether the school district agrees to accept state funding from gaming revenue. Also, the state funding for property tax relief is designed to send the most resources to the communities with the highest tax burden and the least local wealth. You can find the Estimated Tax Relief Per Homestead and Farmstead as of May 1, 2009 by school district on the Pennsylvania Department of Education website.
Property Tax / Rent Rebate
Pennsylvania offers a rebate on either property tax or rent to residents or their spouses who are 65 years of age or older, widows or widowers age 50 or older, and permanently disabled persons age 18 or older. The amount of the rebate is based on your level of income. Homeowners with total income of up to $8,000 receive a maximum rebate of $650. The rebate is progressively reduced to $250 if your income is from $18,001 up to a maximum of $35,000. The rebate for renters is $650 on income up to $8,000 and $500 for income from $8,001 up to a maximum of $15,000. For purposes of this rebate your total income excludes half your social security income.
Seniors who live in Philadelphia, Pittsburgh or Scranton receive an additional 50 percent property tax rebate if their total household income is less than $30,000. Seniors living in the rest of Pennsylvania also receive an additional 50% rebate if their household income is less than $30,000 and they pay more than 15 percent of their income in property taxes.
You can download form PA-1000, Property Tax or Rent Rebate Claim, from the Forms & Publications page of the Pennsylvania Department of Revenue website. The deadline for filing the rebate claim form is June 30.
Sources:
Application for Homestead and Farmstead Exemptions – Fayette County Assessment Office
Estimated Tax Relief Per Homestead and Farmstead – May 1, 2009 – Pennsylvania Department of Education
Pennsylvania Tax Assessors – Assessor Links USA
Property Tax /Rent Rebate Program – Pennsylvania Department of Revenue
Property Taxes on Owner-Occupied Housing by State, 2004 – 2008 – Tax Foundation
The Taxpayer Relief Act – Frequently Asked Questions for Taxpayers – Pennsylvania Department of Education
Reference:
- Pennsylvania – The Tax Foundation: www.taxfoundation.org/research/topic/54.html
- Pennsylvania Home Prices and Home Values – Zillow: www.zillow.com/local-info/PA-home-value/r_47/
- Pennsylvania Local Taxes – Penn State University: cax.aers.psu.edu/taxreform/
