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Philly Tax Amnesty - Potential Effects on Local Real Estate Market

By
Real Estate Agent with US Spaces, Inc.

According to the Philadelphia Inquirer the city of Philadelphia is considering a tax amnesty program to begin as soon as May 3rd. If such a program were implemented it could have wide-ranging effects on the local real estate market - most of them positive.

For one thing homeowners who owe back taxes could have a chance to pay those down and get out from under heavy fees and interest. This may help to reduce foreclosures in the city as many foreclosure victims also have large past-due tax bills that make their situation even more difficult.

Additionally, a large percentage of the vacant and abandoned property in Philadelphia has delinquent taxes. A tax amnesty program could lead to some of these taxes being paid by owners who would then be able to transfer clear title to an investor at a reasonable price. For those tax-delinquent owners who do not take advantage of the amnesty program, it should make it easier for the city to proceed with tax-lien sales that return these properties to the tax-roll.

On the downside, a tax amnesty program could entice tax-payers to delay tax payments in the months between now and the time the amnesty begins. This could negatively impact the city's budget, already in rough shape, and it sets a precedent that it's OK not to pay your taxes - already a popular strategy in Philadelphia.

For the savvy real estate investor a tax amnesty period should present creative investment opportunities, so stay alert to what the city decides to do.

Comments (1)

Rick Cordisco
Pocono Mountain Lakes Realty - Lake Harmony, PA
Pocono Real Estate Professional

This is good news James.

Dec 04, 2009 07:12 AM