We plan to introduce a bill raising the cap on Realty Transfer Tax revenues deposited into Pennsylvania's Housing and Rehabilitation Enhancement ("PHARE") Fund. Our legislation will provide additional funding to PHARE; enabling more older adults, families of low and moderate income, and people with special housing needs to receive much-needed assistance.
 
The Pennsylvania Housing Finance Agency (PHFA), which provides affordable housing resources to vulnerable populations across the Commonwealth, also administers the PHARE program. This program was established by Act 105 of 2010 (the "PHARE Act") to provide the mechanism by which state, federal, or outside funds may be used to assist with the creation, rehabilitation, and support of affordable housing or home modifications throughout Pennsylvania.
 
When real estate is transferred by deed, instrument, long-term lease, or other writing, the Pennsylvania Department of Revenue administers a Realty Transfer Tax (RTT) of 1% on the property's value. Last year's HB 1316/ SB 532 was signed into law through the budget, and this legislation took a tiered approach to gradually increase the cap on the PHARE program to $100 million in fiscal year (FY) 2027-28.
 
Our legislation would raise the $100 million limit on RTT funds deposited into the PHARE Fund by $10 million in FY 2028-29 to a new annual limit of $110 million in 2028-29 and each fiscal year thereafter.  
 
Raising the cap provision in this bill will enable PHARE to address the increased demand for this critical program and reflect increased housing construction costs. This essential increased revenue can be spent on creating and preserving more affordable rental housing units and assisting additional veterans, persons with disabilities, older adults, vulnerable re-entry populations, and young first-time homebuyers. Raising the artificial cap through this legislation will also ensure more individuals receive help with payment assistance, counseling, and construction, as well as transforming blighted neighborhoods marred by vacant, crumbling buildings into promising avenues for beautification, redevelopment, and hope.
 
Please join us in co-sponsoring this critical legislation to help more struggling families afford housing, provide much-needed security and shelter for senior households, and address essential neighborhood redevelopment needs across the Commonwealth.
 

Statutes/Laws affected:
Printer's No. 619 (Feb 18, 2025): P.L.6, No.2
Printer's No. 0619: P.L.6, No.2