Homestead Exclusion Question on November 7 Ballot

Voters who go to the polls on November 7 will find a Ballot Question regarding an amendment to the Pennsylvania Constitution regarding increasing the Homestead Exclusion from 50 percent to 100 percent. The ballot question is:

Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?

Some things to know about this question:

  • It does not eliminate the school board's authority to assess real estate taxes.
  • It allows for the homestead/farmstead maximum exclusion to go from 50 percent to 100 percent but does not require that property taxes be eliminated.
  • The state has provided only a small amount of funds annually through gaming money for the current homestead/farmstead exclusion. The state would have to find a significant revenue source to give to districts enough funds to even reach the 50 percent amount, let alone 100 percent. Districts will most likely not use their own funds to increase the exclusion amount.
  • It limits the exclusion to homestead/farmstead properties. Commercial real estate will not receive an exclusion and still would be fully assessed for property taxes.
  • Separate legislation or funding would have to be passed that provides districts/counties with money to fund the full 100 percent exclusion. It would be a local decision by the local taxing authority to increase the homestead exemption up to 100 percent.
  • Many people believe the passage of this referendum will give legislators incentive to propose SB 76 type legislation that would eliminate property taxes. However, such legislation would actually override this amendment as it would replace local property taxes with the higher state PIT and SUT taxes, making it a state decision instead of a local decision.