Real Estate Tax Exonerations: The Basics

A real estate tax exoneration is an action filed in order to exempt property from the payment of real estate taxes. To file for a real estate tax exoneration, the entity owning the property must be a charitable organization, such as a non-profit or a church. In such a case, the entity would argue that they have no real estate tax obligation because non-profit organizations and church are generally tax exempt under the law. Such actions are initially heard by the real estate tax assessment appeal board in the county in which the property is owned.

In deciding whether a piece of property should be tax exempt, the board uses a legal test known as the HUP test. The name of this test is derived from the Pennsylvania Supreme Court case which established the test. This is a five factor test which consists of the following elements which the church or non-profit organization must satisfy to be successful in a real estate tax exoneration. They are as follows:  1) Advance a charitable purpose, 2) Donates or renders gratuitously a substantial portion of its services, 3) Benefits a substantial and indefinite class of persons who are legitimate subjects of charity, 4) Relieves the government of some of its burden, and 5) Operates entirely free from private profit motive. If these elements are satisfied, the board will grant the exoneration.

If you are interested in filing a real estate tax exoneration, contact one of the experienced attorneys at Trinity Law today at www.TrinityLaw.com. Our firm routinely handles real estate tax matters in York, Lancaster, and surrounding counties. Read our other article on hybrid real estate tax appeals.

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