The Effects Of The Avi On Philadelphia Commercial Real Estate Vs. Residential

By Author: David Henderson
Total Articles: 1
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Soon, Philadelphia’s new property tax program is going to go into practice. Along with the new Actual Value Initiative (AVI), most residential property owners are going to see an increase in their valuations. When it comes to Philadelphia commercial real estate, they typically have unique and complex valuation issues, which have been overlooked by taxing authorities in the past. But, the AVI is expected to increase property taxes for a lot of small businesses, including 73 percent of the 5,147 commercial properties with between 1,000 and 10,000 square feet. In order to ensure that you’re property is valuated properly, you’ll need to take the right steps and measures to manage your real estate taxes.

The AVI is supposed to have a greater impact on residential property taxes, more so than on commercial property taxes, but that doesn’t mean commercial property owners shouldn’t be paying attention to the AVI, and understand the basics. If you don’t understand the basics of the AVI, you could see a spike in your property taxes without knowing or understanding why.

When Philadelphia’s ...
... Office of Property Assessment (OPA) came up with the factors they used to value one’s property, they disclosed those factors to the public. Among the factors included in the AVI calculation are the size and age of the property, a property's location and condition, and whether the property is commercial or residential.

For residential properties, recent sales of comparable properties were factored into the valuations. For Philadelphia commercial real estate properties, and large multifamily properties, the OPA analyzed the property's cost of operation, income-generation, as well as the cost of the land.

If you are unsure if your property, whether it is residential or Philadelphia commercial real estate, is going to be revalued, the easiest way to figure it out is to find out if your property lies within the boundaries of the city. The AVI reform is expected to revalue all properties in the city.

The OPA recently release its estimated AVI reassessment figures. While the final assessment figures won’t be released until May, the reassessment figures will provide property owners with an initial estimate of how the AVI will affect the owner’s property taxes.

The city also created an AVI calculator that will help property owners estimated their anticipated property taxes. The AVI calculator can be found at avicalculator.phila.gov. Entre a property's address, and the website will provide the user with the property's previous assessed value, along with the estimated AVI assessed value.

The AVI is expected to result in local property-tax increases for many residential owners and it should reduce the property-tax burden for many large commercial properties. Small commercial properties are expected to see a tax increase.

Before you find out what your AVI is for your property or properties within the city, do your research, check the AVI calculator, and plan accordingly. There are appeals processes in place that can also aid you if you think your new property valuation is too high.

David Henderson is a freelancer writer for The Henderson Group and is interested in commercial real estate development in PA and office building leasing. For more information about commercial property in Philadelphia, visit The Henderson Group on the web today at http://www.hendersongroupinc.com