Many consider the property tax the “least fair” tax. Lower-value properties are often assessed at higher values and incur higher taxes relative to their market value when compared with higher-value properties. This brief summarizes research that looked into whether more regular assessment of property values can improve the equity of property taxes and how that would affect property owners in low-income and minority neighborhoods.
Research finds that the quality and equity of property tax assessment improved substantially in the two assessments that took place after Philadelphia adopted the Actual Value Initiative. These led to either no change or a modest increase in tax revenues in Philadelphia.
The results highlight the importance of regular reassessments and make the case that, with regular reassessments, the real property tax can be an effective tax instrument.
However, results suggest special attention needs to be paid toward vulnerable populations and neighborhoods. Better administration of tax assessments, as well as well-targeted tax relief programs, should help ensure and maintain an equitable impact.
View the Full Brief