Who Is Exempt from Paying Property Taxes in Pennsylvania?
Property taxes in Pennsylvania are a critical revenue source for counties, school districts, and municipalities. However, not all property owners are required to pay these taxes. The Commonwealth of Pennsylvania offers several property tax exemptions for individuals and organizations who meet legal criteria.
These exemptions are designed to support the financially vulnerable, reward service to the nation, and enable the continued work of nonprofit and charitable organizations.
Veterans with Disabilities
Who Qualifies?
Under the Pennsylvania Constitution Article VIII, § 2(c) and 51 Pa.C.S. § 8902, honorably discharged veterans who are 100% disabled due to a service-connected injury or disease may qualify for full PA property tax exemptions.
To be eligible, the veteran must:
- Be a resident of Pennsylvania
- Have served during a war or armed conflict
- Be 100% disabled (as certified by the U.S. Department of Veterans Affairs)
- Own and occupy the property as their primary residence
- Demonstrate financial need as defined by the Pennsylvania Department of Military and Veterans Affairs (DMVA)
Application Process
Applications must be submitted through the DMVA and include supporting medical and military service documentation. The County Board of Assessment is typically involved in verifying the application before granting the exemption.
Note: Surviving spouses of eligible veterans may also qualify if they remain unmarried and reside in the same home.
Senior Citizens under the Property Tax/Rent Rebate Program
While not a full exemption, partial Pennsylvania tax relief is available for senior citizens, widows/widowers, and disabled individuals through the Property Tax/Rent Rebate Program under Act 1 of 1971 (P.L. 356, No. 91).
Who Qualifies?
- Age 65 or older
- Widows/widowers age 50 or older
- Permanently disabled individuals age 18 or older
To qualify, household income must not exceed:
- $35,000 for homeowners
- $15,000 for renters
Only half of Social Security income is counted toward income eligibility.
Rebate Amount
Rebates range from $250 to $1,000, depending on income level and tax burden. Some areas offer supplemental rebates for qualifying low-income residents in high-tax municipalities.
Nonprofit and Charitable Organizations
Constitutional and Statutory Basis
Nonprofits are generally eligible for property tax exemption in Pennsylvania, provided they meet certain requirements. The landmark case Hospital Utilization Project v. Commonwealth (1985) established a five-part test, known as the HUP Test, to determine whether a nonprofit qualifies as a “purely public charity.”
HUP Test Criteria:
- Advances a charitable purpose
- Donates or renders gratuitously a substantial portion of its services
- Benefits a substantial and indefinite class of persons who are legitimate subjects of charity
- Relieves the government of some burden
- Operates entirely free from private profit motive
Organizations must file a charitable exemption application with the local County Board of Assessment and provide evidence of compliance with the HUP test.
Examples of exempt nonprofits include:
- Religious institutions
- Educational organizations
- Hospitals and clinics
- Museums and cultural organizations
- Social service agencies
Important Note: The burden is on the nonprofit to prove eligibility. A denial can be appealed to the Court of Common Pleas.
Government-Owned Property
Properties owned by the federal, state, or local government are typically exempt from property taxes under constitutional doctrine and statutory law in Pennsylvania.
Examples include:
- Municipal buildings
- Courthouses
- Public schools
- State parks
- Military bases
However, if a government-owned or public property is leased to a private, for-profit business, the property (or portion thereof) may become taxable.
Public Utilities and Railroads (Conditional Exemptions)
Some public utilities and railroad properties receive exemptions or reduced assessments under regulatory frameworks. For example, railroad right-of-ways may have tax-exempt status under state statutes if used exclusively for public transportation.
Homestead Exemption
Pennsylvania allows counties and school districts to adopt the Homestead/Farmstead Exclusion authorized by the Taxpayer Relief Act (Act 1 of 2006). This exclusion reduces the assessed value of a primary residence, thereby reducing the real property taxation burden.
Property Tax Exemption Criteria in Pennsylvania:
- Must be the owner’s primary residence
- Must be approved by the local assessment office
- Only applies to school property taxes (unless adopted by the county)
Each participating school district or county sets the maximum exclusion amount based on available gaming revenue.
Farmland Under the Clean and Green Program
The Clean and Green program (also known as Preferential Assessment) allows owners of agricultural, forest, or open space land to receive tax savings by assessing the land based on use value rather than market value.
Requirements:
- Minimum 10 acres, or
- Generate $2,000 in annual farm income
Owners must enter into a recorded agreement, and converting the land to non-qualifying use may trigger rollback taxes and penalties.
Property Used for Cemeteries or Burial Grounds
Properties used exclusively for burial purposes, owned by nonprofit cemetery associations, are also exempt under Pennsylvania law 72 P.S. § 5020-204(a)(4).
How to Apply for an Exemption in Pennsylvania?
- Contact Your County Board of Assessment: Begin by obtaining the correct forms and procedures specific to your jurisdiction.
- Gather Documentation: This includes proof of ownership, proof of eligibility (e.g., disability ratings, tax returns, nonprofit incorporation papers), and proof of use of the property (deeds, photos, operation descriptions).
- Submit Application Before the Deadline: Most counties require exemption applications to be filed by March 1st for consideration in the upcoming tax year. Always confirm your local deadline.
- Attend a Hearing (If Required): You may be asked to appear before the county board (local government officials) to present your case.
- Appeal if Denied: If your exemption is denied, you may file an appeal with the Court of Common Pleas within a specific timeframe, usually 30 days.
Important Legal Considerations
- Exemptions must be actively maintained. Changing the use of the property can nullify eligibility
- Fraudulent or false claims may result in civil penalties or criminal liability
- Not all counties automatically notify you of approval; follow up after submission
- If partial exemptions are granted (e.g., a church that leases part of its space to a café), only the qualifying portion will be exempt
Get Legal Representation from Our PA Property Tax Exemption Lawyers
At Morella Bencsics, our Pennsylvania property tax exemption attorneys are dedicated to helping individuals, nonprofits, veterans, and senior citizens navigate the often complex exemption process.
Our legal team will start by conducting a thorough review of your eligibility under Pennsylvania law, whether you’re applying as a 100% disabled veteran, a nonprofit entity under the HUP test, or a senior homeowner seeking relief through the Property Tax/Rent Rebate Program.
We guide you through every step, from collecting supporting documentation and completing applications to representing you in hearings before the county assessment board. If your exemption is denied, we’re fully prepared to file an appeal and advocate for your rights in court.
Our goal is to minimize your tax burden while ensuring you receive every benefit the law allows, backed by reliable and personalized legal representation. To schedule your free consultation, call us at (412) 960-1656 or contact us online.