Philadelphia Has Lost Millions On Loopholes In Transfer Tax Rules
The City of Philadelphia has missed out on collecting tens of millions of dollars in transfer taxes from large property sales in the last two years alone.
One Washington Square (above) is one of only two buildings to be sold for more than $100M since the start of 2015 for which the full 4% transfer tax to Philadelphia that all sales should require was paid. The discrepancy is not based on delinquency, but instead a failure on the city's part to accurately value its properties, the Philadelphia Inquirer reports.
The city's property appraisals set the official tax number, but another way developers have managed to avoid paying the full 4% has been to keep a small percentage of properties, thus not designating the transaction as a full transfer and avoiding the tax.
All in all, the Inquirer estimates the city has failed to collect more than $26M in transfer taxes. Municipal spokesman Mike Dunn said the city was aware of the shortfalls, and "the only response the city can make is to tighten the requirements." [Philly]
