City Council has approved changes to Philadelphia's real estate transfer tax law that could add millions to public coffers, while possibly tamping down prices being paid in some of the city's biggest commercial property deals.
Council voted unanimously Thursday to pass legislation with the changes, which aim to close loopholes that have allowed buyers and sellers of real estate to pay the tax against sums far less than actual purchase prices, or avoid paying it entirely.
The vote comes after an Inquirer analysis found those loopholes being exploited more often than not in the city's biggest real estate deals, where the tax savings can be most pronounced.
Of the nine commercial real estate deals valued at more than $100 million between the start of 2015 and late August of this year, taxes were paid on full purchase prices only twice, the analysis found. The seven times it was not paid on the full purchase price allowed buyers and sellers to avoid a total of as much as $28.4 million in city and state transfer taxes.
Revenue Department Commissioner Frank Breslin told a Council committee last month that it is not possible to predict exactly how much new revenue closing the loopholes would generate.
But he said full transfer taxes paid in just one additional commercial real estate deal could “have a multimillion-dollar impact on the city’s finances.”
Read the full article on Philly.com.