Ballard Spahr Secures Win for Philadelphia Condo Owners Challenging Property Assessments

A Ballard Spahr team led by real estate attorney Philip B. Korb and litigator Matthew A. White successfully challenged the valuation method for residential units in Philadelphia high-rise condominium buildings that receive tax abatements, which artificially inflated taxable value for nearly 300 city homeowners.

After a trial earlier this year, Philadelphia Court of Common Pleas President Judge Idee C. Fox ruled this week in favor of the homeowners. In her July 16 opinion, Judge Fox rejected the city's property assessment methodology in favor of the homeowners' methodology, which she found to be "the most common method to value land under professional appraisal standards."

Philadelphia's real estate property taxes are based on assessed values set by the Office of Property Assessment (OPA). The OPA sets a land value and improvement value for each property. Since 2003, the city has given owners of new residential property a 10-year tax abatement on improvements.

In 2017, the OPA, without notice, changed its valuation methods for land beneath high-rise condominium buildings receiving tax abatements. Rather than valuing the land itself and assessing unit owners for their individual shares, the OPA allocated a fixed percentage of the total value of the unit to land. This led to a marked increase in land values—to levels greater than would be found for land on Central Park South in New York City—and significantly increased the property taxes owed by the homeowners.

Ballard Spahr lawyers sued the city on behalf of nearly 300 homeowners from three condo associations challenging the methodology and prevailed in all aspects of their case.

Ballard Spahr Associate Matthew Vahey assisted Mr. Korb and Mr. White in this representation.