City announces tax plan to help some homeowners who have fallen behind

A new bill aims to en­cour­age tax-de­lin­quent homeown­ers to pay back their taxes by of­fer­ing a com­plete or par­tial re­duc­tion of their pen­alty fees.

The city this month an­nounced it will help some homeown­ers who have fallen be­hind in pay­ing their prop­erty taxes to get cur­rent and stay cur­rent.

They can ac­cept that help, or else face fore­clos­ure.

In an Oct. 16 news re­lease, the Rev­en­ue De­part­ment out­lined a pro­gram in which, based on in­come eli­gib­il­ity, will steer own­ers who live in their own homes to­ward pay­ing down their out­stand­ing tax debt.

The four-tiered pro­gram is based on a City Coun­cil or­din­ance, 120054, passed earli­er this year. The city an­nounce­ment, however, made no men­tion of the meas­ure, which was in­tro­duced by Coun­cil­wo­man Maria Quinones Sanc­hez and Coun­cil­men Bill Green and Curtis Jones and co-sponsored by Bri­an O’Neill, Bobby Hen­on, Mark Squilla, Jan­nie Black­well, W. Wilson Goode Jr., Den­nis O’Bri­en, Mari­an Tasco and Dav­id Oh.

The Own­er-Oc­cu­pied Real Es­tate Pay­ment Agree­ment will be offered to de­lin­quent prop­erty tax­pay­ers in a sys­tem based on fam­ily in­come and size.

Us­ing a fam­ily of four as an ex­ample:

— Those with monthly in­comes of $4,622 and high­er must pay the full amounts of past due prop­erty taxes, in­clud­ing in­terest and pen­al­ties. Monthly pay­ment amounts will be set at the dis­cre­tion of the city’s Rev­en­ue De­part­ment.

— Those with monthly in­comes from $3,301 to $4,621 must pay 10 per­cent of their monthly in­comes. They are en­titled to waivers of 100 per­cent of ac­crued pen­al­ties.

— Fam­il­ies with monthly in­comes from $1,981 to $3,300 most pay 8 per­cent of their monthly house­hold in­comes. They are en­titled to waivers of 50 per­cent of the in­terest and 100 per­cent of the pen­al­ties ac­crued on their de­lin­quent taxes.

— Those with monthly in­comes of zero to $1,980 must pay the city 5 per­cent of their monthly in­comes, but no less than $25 per month. All in­terest and pen­al­ties will be waived.

To qual­i­fy and con­tin­ue with the pay­ment plans, ap­plic­ants must re­main cur­rent or un­der agree­ment for cur­rent and fu­ture real es­tate taxes. The pen­al­ties for not liv­ing up to an in­stall­ment agree­ment with the city is to be dropped from the pro­gram and face speedy fore­clos­ure.

Ac­cord­ing to in­form­a­tion on the bill signed by May­or Mi­chael Nut­ter in June, Phil­adelphia has the least-ef­fect­ive tax-col­lec­tion sys­tem of na­tion’s largest cit­ies, with 110,000 de­lin­quent par­cels that rep­res­ent al­most 19 per­cent of all the prop­er­ties in the city.

In a phone in­ter­view last week, Hen­on said his 6th Dis­trict has about 1,700 de­lin­quent own­er-oc­cu­pied prop­er­ties, which rep­res­ent $7 mil­lion of the city­wide $150 mil­lion debt such prop­er­ties owe.

Three-quar­ters of the own­ers of those par­cels in his dis­trict are not on any kind of pay­ment plans right now, he said. They can ap­ply for this new pro­gram, which he de­scribed as ac­com­mod­at­ing, but tough, he said.

“This is a game changer,” Quinones Sanc­hez said in a phone in­ter­view last week.” It gives homeown­ers who’ve been af­fected by the bad eco­nomy the op­por­tun­ity to get on some sort of pay­ment plan that is real­ist­ic for them and po­ten­tially save their homes, she said.

“That is huge for Phil­adelphia,” she said.  “There are a lot of people who, be­cause of the eco­nomy, are backed up, and we want those people to come for­ward and get com­pli­ant,” she said.

In March, when the bill was still un­der con­sid­er­a­tion, Green said the plan was not meant to be an am­nesty or an in­fin­ite-pay­ment plan. Those who don’t pay or play by plan’s rules will start get­ting fore­clos­ure no­tices soon­er, not later. Also in March, Quinones Sanc­hez stressed that res­id­ents will get no­tices about the pro­gram so they know they can get on pay­ment plans. Pre­vi­ously, she had said, get­ting on a plan was a mat­ter of know­ing there was a plan, and not every­body did. 

Quinones Sanc­hez said the bet­ter part of the bill passed in the spring is that “it forces the city to go after the money it should be col­lect­ing from in­vestors and oth­ers who know the city nev­er comes after them.” 

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