How Accurate is the City of Philadelphia Property Assessment on Rental Property?
Most property managers, real estate agents, and experienced real estate investors, often hear from clients or potential sellers how their property is worth a certain amount because their City of Philadelphia Assessment tells them so.
Unfortunately, a property’s value is generally very different than what the City of Philadelphia says it is.
The reason is Philadelphia is assessing the property for tax reasons and not a true valuation.
Where the purpose of an appraisal is to determine the value of a property in the real estate marketplace (how much it can be sold for), A Philadelphia Tax Assessment is heavily based on the value of the land and not as much on the improvements, or the lack of improvements.
The city is interested in what can be there and not what is actually there. This makes sense in that an appraiser enters a home and thoroughly evaluates its pluses and minuses compared to similar properties.
Related Resource: Turndown Rental Applicant
With a Philadelphia Property Assessment, it would be a pretty rare occurrence for the city to actually enter the property or even drive by it. The city of Philadelphia doesn’t care if your countertops are Corian, granite, marble, poured concrete or linoleum. The city values our homes to what they feel would likely be there.
So an appraisal would be the actual value and the assessment would likely be a very different number.