Installment Property Tax Becomes Law
By Jennifer Shockley
When the Taxpayer Relief Act of 2006 was signed into law on June 27, a measure was also enacted to provide for installment payments of local school property taxes. PAR was a vocal supporter of the concept, along with Rep. Mario Civera (R-Delaware). A former real estate licensee, Rep. Civera understands the importance of this issue for current and prospective homeowners in helping to reduce closing costs, property foreclosures and delinquent taxes.
The Pennsylvania REALTOR® recently spoke with Rep. Civera about the new law.
Q: When does the law take effect? Does it apply to all school districts in Pennsylvania?
A: From a technical standpoint, the law took effect immediately. But school districts are only required to begin allowing for installment payments by June 30, 2007, so homeowners will be permitted this option on next year’s school property tax bill. Because Philadelphia has consolidated municipal and school tax bills, installment payments are not available there.
Q: What kind of payment options will be available to homeowners and who determines those options?
A: Each school district in the state will be required to set up an installment schedule within certain guidelines. The installments may not be more frequent than monthly and the school district must schedule at least three installments. All installments must be completed by the county tax lien date. In most counties this is January 1st.
Q: What are the benefits to current homeowners and prospective
buyers?
A: Property tax had been the only major tax bill that Pennsylvanians had to pay in one lump sum; this is no longer the case. Homeowners will be able to budget their property taxes over a longer period.
Q: Is there a discount for paying the taxes early or in one lump-sum?
A: Yes. Anyone who chooses to pay in one lump sum prior to September 1st will receive the current 2-percent discount from their tax bill.
Q: What information should REALTORS® give prospective buyers about this new law?
A: In addition to the option of property tax installments, when discussing property taxes with homeowners, REALTORS® should briefly discuss the potential property tax relief available to them via a local tax shift as well as future gaming revenues providing further property tax relief.
PA Rep. Mario Civera has served the constituents of Delaware County since 1980. Last year, he was elected by his peers as Chair of the House Republican Policy Committee. Prior to his election to the House, he worked as a real estate salesperson for Carr Real Estate in Upper Darby.