Is anyone familiar with how the city of Philadelphia reassesses property value after a rehab project? I'm looking at purchasing a multifamily building that has undergone a complete rehab recently. The project was done in accordance with zoning and construction permits were issued by the city, but the seller did not apply for a 10 year tax abatement with the city (for reasons still unknown to me...). Additionally, the seller has yet to obtain the Certificate of Occupancy from the city (but will be required to do so before settlement as a contingency for the transaction).
The RE taxes at the moment for the property are attractively low (but comparable to neighboring properties that are tenant occupied). The purchase price for the building is significantly higher than the current city market value assessment.
My question is - will the purchase transaction (or even the Certificate of Occupancy) trigger the city to revalue the property much higher than the current valuation, resulting in higher RE taxes on the property?
Appreciate any advice!!
@Yuval B. It has been quite a while since I lived there, but they used to assess upon sale using a simple formula that was based upon purchase price (a percentage). That assessment was used for the first three years. That was both fair and almost impossible to contest, by nature of the formula.
@Walt Payne Thanks for the info!. I heard that the city changed it's strategy after implementing AVI (Actual Value Initialive) in 2013
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