Executive Summary
Why the Controller’s Office Conducted the Investigation
The Office of the City Controller (Controller’s Office) conducted a follow-up investigation to its December 2024 report on the legitimacy of property owners claiming the Homestead Exemption. The Controller’s Office Special Investigation Unit (SIU) initiated the investigation after this issue was raised by City Councilmembers and in response to an inquiry from a Philadelphia resident who identified properties, they believed were improperly receiving the Homestead Exemption. It is crucial that the city prevents ineligible property owners from claiming the Homestead Exemption, as it reduces real estate tax revenue essential for funding the School District of Philadelphia and vital city services.
What the Controller’s Office Found
Since the initial Controller’s Office report was released in 2024, the Department of Revenue (Revenue) indicated on July 29, 2026, that it took remedial action to remove 13,355 illegitimate homestead exemptions from a list of 22,041 properties receiving the benefit. This resulted in an additional $33.5 million in revenue for the School District of Philadelphia and the city. While Revenue stated they reviewed 22,041 properties, the Controller’s Office SIU reviewed every property receiving the Homestead Exemption and identified 58,000 properties with various degrees of risk, resulting in almost 36,000 more properties that are potentially ineligible for the program.
If Revenue realizes similar results from their remedial actions, it could generate an additional $30 million in revenue annually for the School District and the city by investigating all properties with a risk factor that may not be eligible for the Homestead Exemption.
What the Controller’s Office Recommends
While Revenue began implementing some of these recommendations between the release of the Controller’s December 2024 report and the completion of this report, the City Controller’s Office continues to recommend the following:
- Strengthen the verification process for property ownership and ensure each property owner only claims one homestead exemption.
- Enhance communication between City information systems to flag properties with identical mailing addresses or identical owner names for multiple exemption filings.
- Conduct reviews for properties with exemptions where owners reside outside Philadelphia to confirm eligibility.
- Improve data accuracy by requiring standardized name formats for property records to prevent duplicate exemptions under slightly varied names.
- Continue enforcing penalties for improper exemptions and recoup lost tax revenue.
To view the full report and its findings, click “Download Full Report” above.