UPDATE: OPA Releases Final Abatement Regulations Answering Several Questions
The Philadelphia Office of Property Assessment (OPA) recently finalized regulations (the Regulations) addressing many issues that we identified in our January 12, 2022, alert.
As we previously noted, OPA proposed regulations that implemented changes in Philadelphia’s 10-year tax abatement affecting the timing and value of 10-year real estate tax abatements. But the Regulations, as proposed, left unanswered many important questions.
Ballard Spahr’s Zoning and Land Use and Tax Groups submitted written comments and testified at a public hearing on the proposed Regulations and requested clarification from OPA.
In response, OPA issued a written report and revised Regulations to clarify that:
- Mixed-use condominiums will still receive separate abatements based on the predominant use of each unit, meaning commercial condominium units will receive the more valuable commercial abatement. At Ballard’s suggestion, OPA amended the Regulations to implement this change and to provide valuable clarity to developers of mixed-use projects.
- For properties that receive a certificate of occupancy without being sold—i.e., newly completed rental apartments—the abatement will begin the month after the certificate of occupancy is issued. Therefore, for projects with multiple certificates of occupancy, there could be different 10-year abatement periods.
- The Regulations will have no effect on how OPA administers the 30-month developer’s abatement. In other words, even though a mixed-use building may be treated as entirely residential for purposes of the 10-year abatement, the 30-month abatement during construction will still apply only to the residential portions of the building.
- The Regulations apply to all abatement applications pending on January 1, 2022.
The full report of the hearing OPA conducted on the Regulations can be found here, along with the Regulations in their final form.
We will continue to monitor all developments related to the 10-year tax abatement.
For specific guidance, please reach out to members of the Ballard Spahr Zoning and Land Use Team.
- The Ballard Spahr Zoning and Land Use Team
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