The short answer
At today's Philadelphia prices and rents, owning overtakes renting in year 7.
Fold in the city's realty transfer tax, which our standard model leaves out, and it becomes year 9 — a two-year delay, the largest local-tax effect of any page on this site.
The number worth arguing with here is the property-tax rate, and the argument is about geography rather than about taxpayers. The Census-derived rate for this metro is 1.53%. A buyer inside the city pays 1.05%. Charge this page the metro rate and break-even moves from year 7 to year 12 — the largest gap on this site between what the Census shortcut says and what a buyer actually faces, measured in the unit that matters.
| Input | Value | Source |
|---|---|---|
| Typical home value | $402,162 | Zillow Home Value Index (ZHVI), single-family homes only, smoothed & seasonally adjusted (Metro_zhvi_uc_sfr_tier_0.33_0.67_sm_sa_month.csv) (July 2026) |
| Typical single-family rent | $2,361 / month | Zillow Observed Rent Index (ZORI), single-family residences, smoothed (Metro_zori_uc_sfr_sm_month.csv) (July 2026) |
| Effective property-tax rate | 1.05% | Philadelphia's Office of Property Assessment assesses at 100% of market value, and there is a single composite rate for the whole city: 1.3998%, being the City's 0.6159% plus the School District of Philadelphia's 0.7839%. The homestead exemption removes $100,000 of assessed value for an owner-occupier, raised from $80,000 with effect from tax year 2025. On a $402,162 purchase that is ($402,162 − $100,000) x 1.3998% = $4,230 a year — 1.0517%, rounded to 1.05%. The City's own published figure for what the exemption is worth, 'as much as $1,399 a year', is exactly $100,000 x 1.3998%, which confirms both the exemption and the rate independently of this arithmetic. Why not the Census ratio: Pennsylvania caps no assessment and Philadelphia resets nothing on sale — OPA revalues every parcel on its own cycle, most recently for tax year 2025 — so, as in Seattle, Denver and Chicago, the ACS ratio is not describing a different taxpayer here. It is describing a different place, and by more than anywhere else in the cluster. The 1.53% it reports is struck over a CBSA spanning Pennsylvania, New Jersey, Delaware and Maryland, and the New Jersey counties in it — Camden, Burlington, Gloucester — sit in the state with the highest property taxes in the country, at roughly twice the city's effective rate. The ratio's 2019-2023 window also predates the homestead exemption's current size: it was $45,000 through tax year 2022, $80,000 for 2023 and 2024, and $100,000 from 2025, a flat subtraction that bites hardest at exactly this price point. Applying the CBSA ratio to a Philadelphia purchase would overcharge a buyer by about $1,923 a year. The derivation above is deliberately the ceiling in one respect: because a sale does not reset the assessment, a 2026 buyer is billed on OPA's carried-forward estimate rather than on the price they paid, and that estimate lags a rising market. For the record, that ratio is 1.53% — $4,993 median taxes paid ÷ $326,700 median home value for CBSA 37980, per US Census Bureau, American Community Survey — tables B25103 (median real estate taxes paid) and B25077 (median home value), metro level (2023 5-year estimates).City of Philadelphia Department of Revenue, Real Estate Tax rates (1.3998% for 2026 — City 0.6159% plus School District 0.7839%); $100,000 homestead exemption per Philadelphia Code section 19-1301.2 and the Department's 2026 Homestead Exemption guidance; 100%-of-market-value assessment per the Office of Property Assessment (tax year 2026) |
| Homeowner's insurance | $1,795 / year | Bucks, Burlington, Camden, Cecil, Chester, Delaware, Gloucester, Montgomery (PA), New Castle, Philadelphia and Salem Counties. Pennsylvania publishes no premium data below the state level, so this is the NAIC's 2023 Pennsylvania HO-3 average of $1,217 — written premium over written exposures — moved onto the metro by the Philadelphia CBSA's position in the quoted series: $2,255 against a $1,529 Pennsylvania average, a ratio of 1.475. Both sides of that ratio are priced at $300,000 of coverage, so it measures geography and nothing else. $1,217 x 1.475 = $1,795. The level is a 2023 figure, the most recent written data the NAIC publishes, so it trails the 2026 price and rent on the rest of this page. On the one series where the same thing can be measured, Texas, written premiums rose 25% between 2023 and 2025. Treat this as a floor. Two further limits are specific to this metro and larger than the equivalents elsewhere. The CBSA spans four states, and only Pennsylvania's written average is applied to all of it, where New Jersey's is $1,551, Delaware's $1,196 and Maryland's $1,578. And the city is far more expensive than its own metro: quoted at the same $300,000 of coverage, Philadelphia County's ZIP codes average $2,955 against the CBSA's $2,255, which on the same arithmetic would publish $2,352 rather than $1,795 — about $557 a year more. This page follows the cluster's rule and prices the metro, and the page itself states what the city-only figure would do to the break-even year rather than leaving it in this note. This page previously published $2,255, a quoted premium from a rate-comparison sample at a fixed $300,000 of coverage. Quotes run above what insurers actually write, so we moved to the written figure.NAIC, Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner's Insurance Report: Data for 2023 (published July 2026), Table 4 — average premium by policy form, HO-3, written premium divided by written exposures. Counties per US Census Bureau / OMB, Core Based Statistical Area delineation — central counties of each CBSA (July 2023); the quoted premium it replaced per Insurance.com (Quadrant Information Services) average annual homeowner's premium by ZIP code — $300,000 dwelling coverage, $300,000 liability, $1,000 deductible, 2% hurricane deductible in Florida; averaged over the CBSA's central counties and weighted by owner-occupied units (August 2026) (2023 data year) |
Why Philadelphia lands in year 7
Philadelphia is the second-cheapest metro we cover to buy into, and it converts that into an early break-even without needing anything else to go right.
At $402,162 against $2,361 a month the price-to-rent ratio is 14.2 — fourth-lowest in our set, behind Pittsburgh, Houston and Chicago. Month one is $2,872 to own against $2,376 to rent, a gap of about $500 a month, on $89,976 of cash to close.
That gap is real, and the carry behind it is not light: $4,223 in property tax and $1,795 in insurance come to about $502 a month, which is more than the entire monthly difference between owning and renting. Philadelphia is not a cheap city to hold. It is cheap enough to enter that the ownership path still wins early, because $89,976 is a small head start for the renter to be compounding and the mortgage is being paid down against a low balance.
The natural comparison is Pittsburgh, three hundred miles west and on the same state's tax law:
| Philadelphia | Pittsburgh | |
|---|---|---|
| Typical home value | $402,162 | $230,203 |
| Typical rent | $2,361 | $1,707 |
| Price-to-rent | 14.2 | 11.2 |
| Effective property-tax rate | 1.05% | 1.03% |
| Buyer-side transfer tax | 2.289% | 2.5% |
| Break-even | year 7 | year 3 |
Almost identical tax rates on very different prices, and four years between the answers. Pennsylvania's two big cities make the same point our Chicago page makes: the property-tax rate is not what decides this question. The price-to-rent ratio is.
Where 1.05% comes from, and why it is not the Census number
Philadelphia has the cleanest property-tax arithmetic of any metro we cover. There is no assessment ratio, no equalisation multiplier, no county-by-county millage table — one assessment basis, one rate, one exemption.
- The Office of Property Assessment assesses at 100% of market value.
- The 2026 rate is 1.3998% for the whole city: the City's 0.6159% plus the School District of Philadelphia's 0.7839%.
- The homestead exemption removes $100,000 of assessed value for an owner-occupier, raised from $80,000 with effect from tax year 2025.
That is ($402,162 − $100,000) × 1.3998% = $4,230 a year, or 1.0517%, which we publish as 1.05%.
The City's own published figure for what the exemption saves — "as much as $1,399 a year" — is exactly $100,000 × 1.3998%. That confirms both the exemption and the rate without reference to our arithmetic.
The Census ratio says 1.53%, which on this house would be $6,153 — about $1,923 a year more, and enough to move the break-even year from year 7 to year 12. Two reasons, and the first is much the larger.
The metro is not the city, and it is not even the state. The Philadelphia-Camden-Wilmington CBSA spans Pennsylvania, New Jersey, Delaware and Maryland. Its New Jersey counties — Camden, Burlington, Gloucester — sit in the state with the highest property taxes in the country, at roughly twice the city's effective rate. The Census figure averages them in. This page prices a Philadelphia address, so it uses Philadelphia's rate.
The exemption has tripled since the survey window. The 2019-2023 ACS estimates span years when the homestead exemption was $45,000 through tax year 2022, then $80,000 for 2023 and 2024, reaching $100,000 only in 2025. It is a flat dollar subtraction, so it bites hardest at exactly this price point — a quarter of this house's assessed value comes off before the rate is applied. The Longtime Owner Occupants Program, which caps assessment growth for owners of ten years or more who meet an income test, pulls the survey's median further from a buyer still.
Where our figure could be too high. Philadelphia does not reset an assessment on sale — OPA revalues every parcel on its own cycle, most recently for tax year 2025. So a 2026 buyer is billed on OPA's carried-forward estimate, not on the price they just paid, and in a rising market that estimate lags. We apply the rate to the purchase price, which is the ceiling the law can produce. We would rather overstate a buyer's carrying cost than understate it.
A note on precision. The derivation lands at 1.0517%. We publish 1.05% and the calculator charges it, which is about $7 a year less than the arithmetic. Every derived rate and every Census contrast on this site is rounded to two decimals so the two can be read side by side at the same precision.
The catch our model does not include
Philadelphia's combined realty transfer tax is 4.578% — 1% to Pennsylvania and 3.578% to the City, raised from 3.278% on 1 July 2025 to fund the city's housing plan. It is one of the highest transfer-tax burdens of any American city, second only to Pittsburgh's 5% in our own set.
Pennsylvania custom splits it evenly between buyer and seller, so a buyer typically pays 2.289%. On a $402,162 purchase that is about $9,205 in additional day-one cash — a cost our standard model, which assumes no transfer tax, does not charge you.
With it folded in, break-even moves from year 7 to year 9. Two years — the largest local-tax effect on this site, because $9,205 is a tenth of this page's entire $89,976 of cash to close, and it buys no equity.
Two honest qualifications. The 50/50 split is customary, not statutory: the City can collect the whole amount from either party, and in a soft market a buyer may end up paying more than half. And this rate is the City's — a buyer in Bucks, Montgomery, Delaware or Chester County pays the 1% state tax plus a local rate that is typically 1%, not 3.578%.
The insurance number, and the one judgement call on this page
Pennsylvania publishes no premium data below the state level, so $1,795 is the NAIC's 2023 Pennsylvania written average moved onto the metro by the Philadelphia CBSA's position in a quoted series priced at a fixed $300,000 of coverage. That is the same method five other pages here use, and we have kept to it.
It is worth saying plainly what that method costs on this particular page. Philadelphia is far more expensive to insure than its own metro. Quoted on that same basis, Philadelphia County's ZIP codes average $2,955 against $2,255 across the CBSA — 31% higher, the widest city-to-metro gap we have measured. Run the identical arithmetic on the city figure and the premium is $2,352 rather than $1,795, about $557 a year more.
So which is right? We publish the metro figure, because the price and rent on this page are metro-wide indices too, and pricing a metro-typical house against city-only insurance would mismatch the inputs in the other direction. But the honest thing is to give you both numbers and what they do: on city insurance this page is year 8 instead of year 7, and year 11 instead of year 9 once the transfer tax is added. If you are buying inside the city, use the higher figure — and get a real quote, because that is the input on this page with the widest spread around its average.
The assumption that decides it
At our default 7% assumed return on the renter's invested capital, owning overtakes renting in year 7. At a more conservative 5%, owning breaks even in year 5.
Run Philadelphia at a 5% return →
Two years is a narrow sensitivity by the standards of this site, and for the usual reason: at $89,976 the renter's head start is small enough that what it earns cannot reach the answer. Compare Los Angeles, where the same assumption is the difference between year 22 and never.
The input that does move this page is the one above — insurance geography — followed by the transfer tax. Neither changes the verdict. Both change the year.
What we are not modelling
This page prices a City of Philadelphia address, and the metro is much bigger than that. The CBSA has 11 central counties across four states. A buyer in Cherry Hill, Wilmington or Doylestown faces a different tax rate, a different transfer tax and different insurance from the ones above, on a price this page takes from the metro-wide index.
Row-house stock is most of this city, and we price it as a single-family house. That is what it is for Zillow's purposes and for ours — value index against rent index, same housing type on both sides — but a Philadelphia row house is a narrower, older building than the national average behind our maintenance default, and older housing stock costs more to maintain than newer.
We assume you claim the homestead exemption. It is worth $1,399 a year, it has no age or income test, and the deadline is 1 December. If you do not apply, this page's tax line understates your bill by that amount.
The insurance level is a 2023 data year, the most recent written data the NAIC publishes, so it trails the 2026 price and rent above. Where the same thing can be measured — Texas — written premiums rose 25% between 2023 and 2025. Read $1,795 as a floor, in addition to the city-versus-metro question above.
One national appreciation rate, 3.5%, as on every metro page here. We do not forecast metro-level price growth, because doing so would silently drive the result while looking like a fact.
Check it yourself
Open this Philadelphia scenario in the calculator →
Related reading: closing costs by state, which covers transfer taxes like Philadelphia's in more detail, and PITI plus HOA and insurance.