Pennsylvania governor proposes historic change for homeowners

Pennsylvania Governor Josh Shapiro unveiled a comprehensive budget proposal on Tuesday aimed at addressing several key challenges facing the state, including significantly reducing homeownership costs.

For the first time ever, the budget includes a $1 billion property tax relief initiative through the homestead and farmstead exclusion.

Why It Matters

At a time when many Pennsylvanians are grappling with rising living costs, Shapiro’s budget proposal aims to ease one of the most significant financial burdens: property taxes.

This initiative not only promises immediate relief to homeowners but also sets a precedent for comprehensive fiscal reforms in the state’s approach to housing affordability.

What To Know

Shapiro’s budget proposal for 2025-26 is rooted in a series of strategic investments designed to tackle the commonwealth’s most pressing issues, from economic development to public safety and education funding.

A notable aspect of the budget proposal is the over $1 billion allocated for property tax relief, which aims to directly benefit homeowners through the homestead and farmstead exclusion.

This would allow homeowners and farm owners to exclude a portion of their property’s value from taxation, effectively lowering their property tax bills. It’s expected to cut property taxes by more than $160 for the average homeowner this year alone, representing a 71 percent increase from previous savings.

Shapiro’s office pointed Newsweek to the budget address as prepared. “The day I took office, the average homeowner received savings of $225. As a result of this certification, those average savings will climb to $386 per household,” Shapiro wrote.

In addition to tax relief, the budget addresses the acute need for more housing. To spur new development, the proposal includes measures to support first-time homebuyers, improve zoning and permitting processes and enhance statewide housing repair initiatives.

Total Property Tax Burden by Pennsylvania County

Statewide, the average property tax burden in Pennsylvania was 2.57 percent in 2021, according to the Pennsylvania Independent Fiscal Office. This data shows the 10 Pennsylvania counties with the highest property tax burdens in 2021.

What People Are Saying

Governor Josh Shapiro, a Pennsylvania Democrat, said in a budget address to the General Assembly on Tuesday: “We’re cutting costs for Pennsylvanians, but we need to do more. In Indiana County, over the last five years, rent has increased 26%. In Philadelphia County it’s increased by 30%. Two very different counties with the exact same problem that’s mostly been driven by a severe lack of new development across Pennsylvania.

To meet the need for housing this year alone, we need more than 100,000 new homes and apartments. Last September, I signed an Executive Order to create Pennsylvania’s first ever Housing Action Plan and we’ve been busy at work.”

Pennsylvania Lieutenant Governor Austin Davis said in a news release: “Over the past year, I’ve been honored to meet with Pennsylvanians who are getting stuff done in their communities — people who are working to make their neighborhoods safer, teachers who are educating our youngest learners, advocates that are fighting for victims’ voices to be heard… This budget shows we have their back[…].”

What Happens Next

As the budget proposal moves through the General Assembly, it will be subject to negotiations and amendments. The outcomes of these discussions will be crucial in determining how extensively the proposed tax reliefs and housing measures will be implemented.