PHILADELPHIA (KYW Newsradio) — The city controller says real estate tax fraud is costing the city and school district millions of dollars every year. The controller issued the finding after investigating alleged abuse of the homestead exemption.
While recovering from a stroke, Robert Faulds had a lot of time on his hands. He went down the proverbial rabbit hole of the computer age.
“Lo and behold, I found there were many websites on that internet,” he said — among them: city data showing properties receiving a homestead exemption. A homestead exemption is a break on property taxes, available only to homeowners for their primary residence.
Faulds noticed applicant mailing addresses that didn’t match the property addresses. Some were in New York. Some claimed the exemption for multiple properties. But the clincher, he said, was a funeral home.
“And I said, ‘How in the world could a funeral home qualify?’ And that’s when I thought, maybe, they don’t train the personnel in the department that looks over the questionnaires.”
Faulds wrote to the Revenue Department but got no response, so he turned to City Controller Christie Brady. She was so interested, she launched her own investigation.
“With investigators identifying over 23,000 properties that appeared to be ineligible to receive the exemption.
Brady estimates the city loses $11 million a year to the abuse. She’s urging the Revenue Department to strengthen the verification process for the exemption, establish penalties for misusers and try to recoup what’s been lost. She also urged property owners to do the right thing.
“If you are illegitimately taking this, if that is not your primary residence, now is the time to correct the situation.”
She says you can withdraw from the program through a form on the Revenue Department website.