According to National Realty Investment Advisors, there are many reasons to build residences in Philadelphia. This innovative housing development firm explains how the city is more than just a historical landmark filled with influential buildings. It is a busy, urban metropolis that sports one of the most diverse populations in the entire country. Philadelphia is a melting pot of various communities that live and work together to perpetuate the productivity of the city. However, one of the most attractive qualities about Philadelphia is often underestimated. Real estate investors and builders would be wise to look into the city’s building options, as there are significant benefits that are not found in some other parts of the country.
National Realty Investment Advisors mentions how there is a significant incentive in the city of Philadelphia for people who are interested in new housing development or existing housing rehabilitation. This incentive is a 10-year tax abatement that is offered by the Board of Revision of Taxes. What this does is allows owners to avoid excessive property tax charges over a period of 10 years on their renovated or 100 percent new construction real estate buildings. National Realty Investment Advisors is a specialist investment firm that obtains raw land parcels in the city at under market value rates, builds 100 percent new construction at wholesale prices, and then has that new property locked into the 10-year tax abatement where the building is tax free for a 10 year period.
National Realty Investment Advisors states that in order to benefit from these tax offers, developers and homeowners in Philadelphia must abide by certain guidelines. The steps that are taken follow a strict document timeline, and it is important for interested parties to pay close attention to the schedules. There are two major categories for tax abatement in Philadelphia: new construction and improvement to existing residences. Both of these categories provide their own set of advantages for people who are interested in jumping into the Philadelphia real estate market, which is growing exponentially with each passing year.
For new construction of residential properties, people need to adhere to the following rules:
It is mandatory to apply to the Board of Revision of Taxes within a 60-day window from the time that the construction-building permit was issued by the Licenses and Inspections office.
The construction must be classified as an eligible unit according to Philadelphia tax standards. The unit must be located in a single house, duplex, triplex, townhouse, rowhouse, apartment building, condominium, or cooperative residence.
- The abatement is for the improvement’s assessed valuation. It starts on the month following the transference of the real estate property from its previous owner to the new, qualified owner.
National Realty Investment Advisors indicates that there are several guidelines to follow with regard to improvements made on existing residential properties. Philadelphia is home to many older buildings and structures that are no longer in use. Real estate investors and developers work together to take down these obsolete structures and use the property to provide housing opportunities. The guidelines for tax abatement on existing property rehabilitation are as follows:
It is required to apply to the Board of Revision of Taxes by December 31st of the same year of issuance of the building permit to construct.
Similar to new residential construction, units that are being rehabilitated or restored need to be considered eligible. The property must contain one or more dwelling units that are certified through the Licenses and Inspections office. Alternatively, the unit can be deemed eligible for tax abatement improvement by being declared unfit for human habitation by the Department of Health. Lastly, the property can be considered eligible for tax abatement if it is the subject of a Philadelphia-decreed order that declares that it has to be vacated, condemned, or demolished.
- Abatement for existing residential improvements is limited to the assessed value of the cost of improvement. Abatement begins on January 1st of the tax year that immediately follows the year that the property improvement has been certified as complete.
National Realty Investment Advisors Indicates Short-term Abatement
In some instances, developers of residential properties have the option to qualify for a short-term abatement. National Realty Investment Advisors states that these developers have to follow similar guidelines for the 10-year tax abatement previously mentioned. The guidelines state:
Application to the Board of Revision of Taxes must be completed by December 31st of the same year that the building permit to construct has been issued.
Abatement is strictly limited to residential real estate that is new or existing.
Abatement equates to 100 percent of the value of the improvements, starting on the first day of the month following the same month that the Licenses and Inspections office issued a building permit.
- The abatement term lasts up to 30 months or until the property has been sold, occupied, or transferred to a new owner.
Dan Hirshout, National Realty Investment Advisor Senior Project Manager states, “Times are tough and the economy is still crawling back into prosperity. Taking advantage of Philadelphia’s tax abatement program can lead to significant savings for residents, investors, and developers. That extra money in the bank at the end of the month can be beneficial, and people should not hesitate to consider their options. Philadelphia is just one of only two cities that offer this unique advantage, so it is wise to look into its tax abatement programs. We also feel Philly is the best because of its high rents, low vacancy rates, stable home and equity profit values. With professional management like NRIA, you don’t have to do much at all.”
National Realty Investment Advisors encourages people who are interested in properties in Philadelphia to further research tax abatement programs so as to take advantage of their favorable qualities.