Understanding Pennsylvania Personal Property Tax

Counties, cities, and school districts all tax personal property

Philadelphia Neighborhood Row Homes
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The state of Pennsylvania does not levy or collect taxes on real estate or personal property. Instead, those taxes are reserved for local governments like counties, municipalities, and school districts. In most areas of Pennsylvania, all three groups levy real estate or property taxes. But you very well might pay different rates than residents of other counties, cities, or school districts because each jurisdiction can set its own rates. 

What Property Is Taxed in Pennsylvania?

Property taxes in Pennsylvania apply only to real estate, which means land and buildings, and are not levied on cars, business inventory, or any other type of personal property. Certain types of property are exempt from property taxes in Pennsylvania; these include places of worship, places of burial, charitable and educational institutions, and government property.

How to Calculate

Property tax rates in Pennsylvania are referred to as millage rates, and they are figured in mills. One mill is equal to 1/1,000 of a dollar. These millage rates in Pennsylvania are set by individual municipalities and school districts. This is why property tax bills on real estate can vary from one place to another across the state. The amount of property tax you owe is based on a combination of your assessed property value as determined by the county assessment office and the millage rates of the municipality and school district in which you live.

Most Pennsylvania residents pay a property tax that ranges from 1 to 2 percent of the assessed value of their real estate. For example, a resident who owns a house in Beaver County, Pennsylvania, that is assessed at $250,000 would pay personal property tax of about $4,300, as of January 2018.

Tax and Rent Rebate Program

Taxpayers who qualify can file for Pennsylvania's Property Tax and Rent Rebate and be reimbursed up to $650 a year for the amount they paid in property taxes or rent. Supplemental rebates for qualifying homeowners can raise that to $975. Applicants need to file Form PA-1000 by July 1 of the tax year. This program is available those 65 years and older, widows or widowers age 50 and older, or disabled taxpayers who meet other conditions. There are income limits of $35,000 per year for homeowners and $15,000 for renters, with half of Social Security income excluded. These benefits, limits, and requirements are valid as of January 2018.

Pennsylvania Homestead/Farmstead Exclusion Act 50

Act 50 of 1998 allows participating Pennsylvania school districts, counties, and municipalities to offer property tax reductions to permanent residents of their jurisdiction. This homestead exclusion reduces the assessed values of single-family homes, condominiums, farms, and other places of permanent residence, reducing the property taxes on the property.

The Homestead exclusion is only available in jurisdictions that have approved it through ordinance or referendum. To receive a homestead or farmstead exclusion on your property, you need to file an application form with your county assessor.

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