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News Brief Headlines
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- · Mortgage Forgiveness Tax Treatment Gets One More Year
- · FEMA releases streamlined Letter of Map Change process
- · County budget holds taxes steady
- · Court orders Warrington to return $1 million in business tax receipts
- · Silverdale tax rate stays the same for 50th year
- · Dublin Borough works on revitalization plan
- · Downingtown residents to see increase in fees
- · Parkesburg to repeal per capita and occupational tax
- · West Chester to amend parking regulations for multi-family dwellings
- · Oxford Area board accepts limit on tax hike
- · Budget-less Colwyn facing tax sanctions
- · Chester dodges tax hike, ends ‘12 with surplus
- · Eddystone approves budget draft calling for tax hike
- · Rutledge budget calls for millage spike
- · Lower Merion passes budget with no tax increase
- · Springfield Township adopts budget with first tax increase since 2005
- · Cheltenham residents spared tax increase
- · Conshohocken leaves property taxes unchanged
- · Lower Providence approves budget
- · Property reassessment figures bolster Nutter’s position on AVI
- · Lead Paint Disclosure and Certification Law
- · Frankford on the fast track to revitalization
Mortgage Forgiveness Tax Treatment Gets One More Year
While there is still very little focus on the importance of the Mortgage Forgiveness tax credit, the fiscal cliff deal did extend its provisions for one more year. The credit, which was set to expire at the end of 2012, is crucial to foreclosure mitigation efforts such as principal forgiveness and short sales. Normally, U.S. law decrees that when a lender forgives all or a portion of a borrower’s debt, the forgiven amount is considered taxable income for the borrower. This is known as Cancellation of Debt (COD) Income and must be included in a taxpayer’s gross income. This Act, however, created an exception to this rule under the U.S. Tax Code. The Mortgage Forgiveness Debt Relief Act allows homeowners who received principal reductions or other forms of debt forgiveness to not pay taxes on the amount forgiven. The amount extends up to $2 million of debt forgiven on the homeowner’s principal residence. For homeowner’s to qualify, their debt must have been used to “buy, build, or substantially improve” their principal residence and be secured by that residence. The law, which was passed in 2007 with a 5 year sunset provision, will now be in effect until January 1, 2014. Here is a link to the official NAR document on the fiscal cliff real estate provisions, including the 1-year Mortgage Cancellation extension: http://www.ksefocus.com/billdatabase/clientfiles/172/4/1711.pdf.
FEMA releases streamlined Letter of Map Change process
On December 17, 2012, FEMA launched the Online Letter of Map Change (LOMC) – a new way to submit a request to change a property’s flood zone designation. The new Online LOMC application allows anyone to electronically submit required documents and property information when they are requesting that FEMA remove their property from a Special Flood Hazard Area (SFHA). Applicants can use this new website to request a Letter of Map Amendment (LOMA) instead of using the MT-EZ paper form. A LOMA is a letter from FEMA stating that an existing structure or parcel of land will not be inundated by a base flood. LOMA-eligible requests must be concerning properties on naturally high ground, which have not been elevated by fill. FEMA is planning to roll out more features in the coming months.
The new Online LOMC offers many advantages over the paper-based request process:
• Applicants may save information online and finish applying at their convenience
• Clear and intuitive interface makes applying user-friendly
• Frequent applicants can manage multiple LOMA requests online
• More efficient communications with LOMA processing staff
• Applicants can check their application status in real-time
For more detailed information, visit www.fema.gov/online-lomc
County budget holds taxes steady
Bucks County commissioners unanimously adopted a $390.7 million budget for 2013 without raising taxes. To balance the budget, the county will continue a hiring freeze that was instituted a year ago. The county laid off 24 workers last year but expects that 50 employees will retire or resign by midyear, and that layoffs will not be needed in 2013. The county real estate tax rate will remain at 23.2 mills – with one mill equal to a tax of $1 for each $1,000 in assessed property value. The owner of a home assessed at the county average of $35,900 can expect a tax bill of $835. For the first time in four years, the budget was not balanced using a transfer from the county rainy day fund.
Source: Philadelphia Inquirer; 12/20/2012
Court orders Warrington to return $1 million in business tax receipts
The Pennsylvania Supreme Court has overturned Warrington’s business privilege tax, saying the township must return more than $1 million in tax receipts that have been collected from merchants over the past three years. The ruling reversed both Bucks County and Commonwealth court decisions, and found the township’s ordinance imposing a fixed tax on businesses with gross receipts over $1 million illegal. The Supreme Court’s opinion stated that the 2008 ordinance that levied a $2,600 annual tax violated part of the Local Tax Reform Act. The act prohibits mercantile or business privilege taxes on part or all of a businesses’ gross receipts. Warrington has held the tax revenue in an escrow account and returning the monies will not impact the township budget.
Source: PhillyBurbs.com; 12/20/2012
Silverdale tax rate stays the same for 50th year
Silverdale Borough council gave final approval to the 2013 budget on Dec. 17. Borough Council President Clair Black said that the last change to the borough’s property tax rate was in 1963 – when the rate was reduced. The borough property tax rate will remain at 2.75 mills. This amounts to a tax of $82.50 on a home assessed at $30,000. Sewer and trash collection rates will also remain the same in 2013. The borough has also announced plans to collect the three largest delinquent sewer bills – one is about $6,000 and the other two are $11,000. Liens have already been placed on the properties and the owners were given opportunities to set up payment plans. The borough is sending letters to the property owners informing them that they could lose their homes if the bills are not paid.
Source: Perkasie News Herald; 12/21/2012
Dublin Borough works on revitalization plan
Dublin Borough held a public meeting on Dec. 13 to discuss the revitalization plan being developed in the borough. The Dublin Revitalization and Visioning Task Force has a mission of developing planning tools that will lead to more jobs and successful businesses in the borough. Some suggestions included adding street trees, more attractive street lights, and improving signage and overall walkability within Dublin Borough. Borough Council President Nicholas Rosica shared that resident requests to replace the playground in the park have been heard, and that the playground will be replaced during upcoming park work. The new revitalization plans will most likely include changes to the zoning ordinances and incentives to encourage development that follows the plans. The next public meeting to discuss revitalization is expected to held in March.
Source: Perkasie News Herald; 12/20/2012
Downingtown residents to see increase in fees
Downingtown Borough residents will have to prepare for other fee increases along with the real estate tax for 2013. The Downingtown Municipal Water Authority will be increasing its fees, effective Jan. 1, 2013. According to Nathan Roush, executive director for the water authority, and its board Director Hank Hamilton, the increase in fees is a result of flat revenue. The new revenue from the increase will be used for the water authority’s capital improvement projects and repairs to infrastructure. Borough customers that use at least 5,000 gallons in a quarter-long period will see an increase of $10 per quarter. Customers who use less than that amount will see an increase of $2 for every 1,000 gallons per quarter. Council members are also waiting to hear if the borough’s administration will recommend an increase in sewer fees. The current fee is $5.50 per thousand gallons per day. Downingtown Council approved a tax increase included in the 2013 budget, through which residents will see a rise in real estate taxes. For the average homeowner, the rate hike to 7.65 mills will translate to an increase of $68 in taxes for the year.
Source: Daily Local; 12/27/2012
Parkesburg to repeal per capita and occupational tax
The Borough Council of Parkesburg will consider for adoption a proposed ordinance repealing the annual per capita tax and the annual occupational tax on residents. The amount of revenue estimated to be lost from the change is $17,000 for 2012, with collection costs estimated to be $3,000. The ordinance will be considered for adoption on Monday, January 21, 2013 at 7:00 p.m. at the Borough of Parkesburg Municipal Building located at 315 West First Avenue
Source: Daily Local; 12/23/2012
West Chester to amend parking regulations for multi-family dwellings
West Chester Borough Council will consider adopting an amendment to Chapter 112 of Borough Code which relates to parking regulations. The Ordinance would revise the off street parking regulations for multifamily dwellings based on the number of bedrooms in the dwelling unit and clarify the off street parking regulations for new buildings erected in the Town Center District. The ordinance will be considered on January 16, 2013 at 7:00 p.m. at a public hearing in Borough Hall, 401 East Gay Street, West Chester.
Source: Daily Local; 12/27/2012
Oxford Area board accepts limit on tax hike
If Oxford Area’s school property taxes go up next year, the increase will be no more than 1.7 percent, the limit set by the state’s Act 1. During a meeting Thursday, school board members voted to stay within that taxing limit as they prepare a 2013-14 budget. Had they elected to go higher, a voter referendum would be needed and the budget preparation process would be accelerated to meet earlier deadlines. Although the board agreed to stay at or below the 1.7 percent limit, its members have not made a decision about how to bridge the $3.4 million gap between anticipated revenues and expenses. Also a problem on the revenue side of the budget is the increase in successful assessment appeals by property owners. Board member Donna Arrowood reported there were 182 assessment appeals this year resulting in a loss of $6 million in assessed value that translates into a loss of $180,000 in revenues.
Source: Daily Local; 12/24/2012
Budget-less Colwyn facing tax sanctions
Despite a motion to approve Colwyn’s 2013 budget, the borough council failed to vote on the proposed budget before the state-mandated deadline expired. With no budget as of the end of 2012, Colwyn is subject to unspecified sanctions, according to Crystal Powell, the borough’s solicitor. Possibly worse than any sanction, the borough is prohibited from levying a real estate tax — its primary source of income. “Without a passed budget, Colwyn can’t pass a tax ordinance,” Powell said following the meeting. “Without that ordinance, legally the borough can’t collect any taxes.” The budget proposal presented totalled more than $1.7 million in spending with no major changes compared to last year’s budget, according to Council President Tonette Pray. A letter was sent to borough employees informing them payroll checks could not be issued as scheduled on Dec. 28, due to lack of cash in the borough’s accounts. The borough was to seek a Tax Anticipation Note to bridge the financial gap until tax revenues began rolling in for 2013, but that short-term solution may be in jeopardy.
Source: Daily Times; 1/2/2012
Chester dodges tax hike, ends ‘12 with surplus
Chester City Council approved its 2013 budget, adopting a $47.17 million spending plan that holds the line on all city taxes. Councilman Nafis Nichols also announced that the city expects to finish 2012 with a surplus despite having to incur an arbitration award to the firefighters union. That package cost the city an additional $2.4 million and included retroactive wage increases being spread across the 2012 and 2013 budgets. In late November, Nichols had projected that the city would conclude the year with a deficit, but the city took various measures to cut expenses. Chester also gained some unanticipated revenue from a pilot program and other sources. The real estate tax remains at 29.792 mills, which equates to about $536 in taxes on a house assessed at $18,000. The same household also would pay $27 in library taxes, slated at a rate of 1.5 mills. The budget also keeps the city’s earned income tax rate for residents at 2.15 percent and its rate for nonresidents at 1.15 percent. The business privilege tax remains at 3.65 mills for retail and services businesses. It stays at 2.74 mills for wholesale businesses.
Source: Daily Times; 12/26/2012
Eddystone approves budget draft calling for tax hike
Eddystone Borough Council approved a preliminary 2013 budget requiring a 0.8-mill tax increase for a total millage rate of 6.55 mills. For a property assessed at the average of $70,000, the proposed millage rate would result in a $56 a year increase in borough taxes, the first tax increase in seven years. The sewer fee will remain at $200 per unit under the preliminary budget. Residents do not pay a trash removal fee, something that acting Borough Manager Joseph Possenti said is unique.
Source: Daily Times; 12/22/2012
Rutledge budget calls for millage hike
Rutledge Council approved a final 2013 budget, requiring a tax increase of 0.61 mills, for a total millage rate of 5.29 mills, or $5.29 for each $1,000 of assessed property valuation. For example, a house with an assessment of $100,000 will pay a borough real estate tax bill of $529. The trash fee will go up $26.89 per unit, for a total of $210.06. The sewer fee will remain at $544.14 per unit.
Source: Daily Times; 12/26/2012
Lower Merion passes budget with no tax increase
The Lower Merion Board of Commissioners recently adopted a 2013 budget with no real estate tax increase. The adopted $58.24 million General Fund budget will continue with a 4.19 mill tax rate for the second year. The owner of a single-family home at the average assessed value of $360,000 will pay $1,508 in township real estate taxes. The adopted budget is $340,295 higher than the budget proposed in November, with the bulk of the increase – $313,000 – attributed to the first year costs of a new four-year police contract.
Source: Main Line Times; 12/27/2012
Springfield Township adopts budget with first tax increase since 2005
Springfield Township commissioners approved a $16.8 million budget for 2013 that includes a property tax increase of 6.3 percent. This will mark the first tax increase in the township since 2005. The tax rate is set at 3.584 mills, with one mill equal to $1 in taxes for every $1,000 in assessed property value. The owner of a home assessed at the township average of $175,400 will pay $628.63 in township real estate taxes, an increase of $37.53 over 2012.
Source: Springfield Sun; 12/21/2012
Cheltenham residents spared tax increase
The Cheltenham Township Board of Commissioners unanimously approved a 2013 budget that will not include a tax increase. In November, a budget was proposed that would have increased township real estate taxes by 6.5 percent to close an estimated $2 million deficit. To close the deficit, the township made $662,000 worth of personnel cuts. The commissioners also approved Bryan Havir as the new township manager.
Source: Glenside News; 12/30/2012
Conshohocken leaves property taxes unchanged
Conshohocken Council unanimously approved the final 2013 budget that will keep the current real estate tax rate at 3.5 mills. One mill is equal to a tax of $1 for each $1,000 of assessed property value. The owner of a home assessed at the borough average of $100,000 will pay $350 in borough real estate taxes in 2013.
Source: Times Herald; 12/20/2012
Lower Providence approves budget
The Lower Providence Board of Supervisors approved a $9.5 million final budget for 2013 on Dec. 20. The spending plan maintains the current real estate tax rate of 1.512 mills. A homeowner with a property assessed at the township average of $167,022 will see a property tax bill of $252.54. The township will use $730,023 from the fund balance in order to balance the 2013 budget. This is the ninth year in a row that Lower Providence has not increased taxes, although Township Manager Richard Gestrich warned that the budget picture for 2014 may need to include a tax increase.
Source: Montgomery Life; 12/26/2012
Property reassessment figures bolster Nutter’s position on AVI
The preliminary numbers for Philadelphia’s citywide property reassessment have arrived, and they appear to be good news for Mayor Nutter and advocates of his tax-reform effort. The data – while incomplete – show that the property-tax rate under a new system would be considerably lower than the ruinous rate predicted by City Council this year. Nutter called the nearly completed reassessment of 579,000 parcels “an important milestone” in fixing the city’s infamously inequitable property tax system. As the planned changeover to the new system is made next year, Nutter pledged not to seek a property-tax hike, which would be the first time in three years without an increase. The reassessment so far has tagged the market value of all taxable property in the city at $96.5 billion. To collect the same amount of property tax in the next fiscal year – $1.2 billion – the administration figures the tax rate would have to be 1.3 percent of a property’s value, if no tax relief measures are added. That means the owner of a home worth $100,000 would pay $1,300 under the 1.3 percent scenario, or $2,600 for a $200,000 property, an equation Nutter called “the ultimate in just mathematics.” The average residential property tax bill is now about $1,400, but that’s based on a system with wildly disparate assessments that usually don’t reflect actual market value. Much work remains to determine how individual homeowners and neighborhoods would be affected under the new system.
Source: Philadelphia Inquirer; 12/21/2012
Lead Paint Disclosure and Certification Law
Beginning December 21, 2012, the Lead Paint Disclosure and Certification Law requires Philadelphia landlords to ensure that property rented to families with children 6 years and younger is lead safe. The law states that upon turnover, before renting any house or apartment built before 1978 to new tenants with children aged 6 years and younger, the landlord must:
- · certify the property is lead safe or lead free
- · provide the tenant with a copy of a lead safe or lead free certificate, along with other required information
- · provide the Department of Public Health with a copy of the lead safe or lead free certificate, signed by the tenant
In addition, landlords must indicate they are complying with the law when they apply for a new or renewed rental license. For more information about the new requirements and for links to the new law, sample lead certificates, and a list of certified lead inspectors visit http://www.phila.gov/health/childhoodlead/LeadPaintLaw.html.
Frankford on the fast track to revitalization
For too many years, Frankford’s main drag hovered in decline under the El tracks – dark, dirty, desolate, plagued by drugs and crime and fear. Today, the bustling 4600 block of Frankford Avenue is the targeted center of a revitalization that Jason Dawkins and his boss, Councilwoman Maria Quinones-Sanchez, hope will radiate out along the Avenue from Womrath to Bridge streets. Karen Lockhart Fegely, director of the city Commerce Department’s Office of Neighborhood Economic Development, which is funding much of Frankford Avenue’s revitalization, said that keeping the avenue clean and well-lit and replacing deteriorated old facades with bright new ones has fueled business-corridor transformations from Roxborough and Manayunk to Fishtown’s Girard Avenue.
Source: Philadelphia Inquirer; 12/26/2012