Homestead exemption laws vary from state to state and county to county, but the fundamental principle remains. Homestead exemption laws were made to protect the homeowner and their family from paying high property taxes. At its core, homestead exemption reduces the taxable value of a homeowners’ primary residence, meaning a portion of the home value will not be taxed. This reduction results in lower property tax bills. The available exemption amount can depend on age, disability, marital status, dependent children living at home, and property type. But one variable remains consistent: homestead exemption laws only apply to the homeowner’s primary residence. No one is supposed to benefit from multiple homes! Yet, many do.
After a thorough investigation by her department, Philadelphia’s Controller, Christy Brady, has found that 23,000 properties are likely improperly enrolled in the Homestead Exemption Program. Brady found that Philadelphia property owners with mailing addresses outside of Philadelphia, and even as far away as California, are receiving this deduction. Businesses and landlords are getting it, too. And in other cases, the same person is successfully applying for multiple exemptions. The result is that Philadelphia is losing about $11 million a year to fraud, which greatly impacts the School District of Philadelphia.
Just over half of Philadelphia’s real estate tax revenues go to the School District of Philadelphia. Which, according to Brady’s calculations, means the education system is losing out on just under $6.4 million annually. Brady said at a recent news conference, “Our school district and city cannot afford to lose millions of dollars that are essential for funding vital services.” Which begs the question, what district can? The answer is none of them.
Shout out to Christy Brady in her fight against fraud.
Today’s Fraud of The Day is based on article “Homestead Exemption fraud costs Philly $11.4 million a year, controller says” published by Metro Philadelphia on December 4, 2024.
City Controller Christy Brady speaks about her office’s investigation into fraud with the Homestead Exemption program during a news conference Wednesday, Dec. 4. Fraud within the Homestead Exemption Program – Philadelphia’s popular real estate tax relief benefit – costs the city’s government and schools more than $11 million a year, the City Controller’s Office estimated in a report published Wednesday.
Investigators from the controller’s office used data-mining tools and municipal records to identify 23,000 properties that are likely improperly enrolled in the program, which is reserved for owner-occupied homes.
